Stocks slide, rupee slips on Syria tension, downgrade jitters

Tensions over Syria today hit the Indian markets badly with the Sensex nosediving over 651 points and rupee ending 163 paise down at 67.63 against dollar as investors were already spooked by rating downgrade fears.
Hit hard by panic selling, the Sensex had slumped as much as 720 points, while the rupee dropped to as low as 68.27 on hefty capital outflows.
With the markets in doldrums, gold once again surfaced as a safe haven for investors. The precious metal surged Rs 1,610 to Rs 34,370 in Kolkata, Rs 970 in Mumbai, Rs 440 in Delhi and Rs 350 in Chennai.

The mayhem in stocks and rupee was also triggered by a spate of poor economic data, including fall in growth of eight infrastructure industries in July and contraction in an indicator of manufacturing sector activity in August.
"S&P warned there is 1-in-3 chance for India's rating to be cut over next 2 years. Secondly...Fears of Syria attack," said brokerage GEPL Capital.
Besides, Goldman Sachs today also cut India's growth forecast for this fiscal to 4 per cent from 6 per cent earlier and said it expects the rupee to touch 72 against the dollar in the next six months. This follows similar bearish calls by JP Morgan, HSBC Global Research and Nomura recently.

At the Interbank Foreign Exchange (Forex) market, the domestic currency commenced weak at 66.29 a dollar from last close of 66.00 and immediately touched a high of 66.25.

Later, it fell back sharply in line with fall in local stocks to a low of 68.27, before recovering some ground to settle at 67.63, still down by 163 paise or 2.47 per cent.
Rupee had hit record intra-day low of 68.85 on August 28.
Russian media said missile launches were detected from the Mediterranean Sea, amid concern about military action in Syria. However, Israel later clarified it had carried out a joint missile test with the US in that area.

Sensex ended at 18,234.66, a drop of 651.47 points or 3.45 per cent. The fall was the most since August 16, when it fell 769 points. This was the first loss after 4 days of gains, during which it rose by 918.05 points. Investors were poorer by a staggering Rs 1.63 lakh crore.