Sensex down 150 points on rupee fall; Jindal Steel tanks

The BSE Sensex dropped 150 points on Tuesday tracking weak Asian shares and the sharp plunge in Indian rupee, which hit a new record low of 58.70 against the dollar. Asian shares sagged to a fresh 2013 low as China growth worries and continued uncertainty over the U.S. bond-buying programme depressed sentiment.

The Sensex traded 123 points lower at 19,318, while the Nifty declined 35 points to 5,843 as of 10.31 a.m. The rupee traded at 58.64, down nearly 50 paise from Monday's close of 58.15.

Mayuresh Joshi of Angel Broking told NDTV that stock markets should stay on the subdued side tracking the weakness in the currency market.

"With the fall in the rupee, some hit will be taken by oil marketing companies as under-recoveries will go up, domestic jewellers will find it difficult to hedge their books. IT and pharma companies should gain. However, companies with dollar denominated debts (FCCBs) will be adversely impacted," he added.

The rupee's fall has escalated worries about the country's current account deficit and has complicated the task for policymakers looking to revive an economy that grew at its slowest in a decade in 2012-13.

The fall has also sparked concerns that foreign investors would turn net sellers after strong buying this year, offsetting initial hopes that Friday's slightly stronger-than-expected jobs data would reduce the prospect of an early rolldown in the U.S. monetary policy.

"There has been an outflow from the debt markets by FIIs due to concerns on the currency as well as the direction of the markets. There is a fear that if something similar happens to equity markets, our markets may not be able to absorb selling pressure from FIIs without reacting sharply lower," said Deepak Jasani, head of retail research at HDFC Securities.

Barring IT stocks, all other groups traded lower. Banking, metal, realty, auto and consumer durables shares were all down over 1 per cent.

On the Nifty, 35 stocks traded lower led by Jindal Steel, which fell over 10 per cent on reports that the CBI was raiding the company's offices in a case pertaining to the coal scam.

Lenders such as ICICI Bank, IndusInd Bank and Axis Bank were among the top Nifty losers.

HCL Tech, India's fourth largest outsourcer, was the top Nifty gainer, up 2 per cent. Two-wheeler manufacturer Hero MotoCorp and drug maker Ranbaxy also saw buying interest.


(With inputs from Reuters)