Sensex sees worst selloff in 5 months; rupee below 63/dollar
The BSE Sensex closed 426 points or 2 per cent lower on Monday, while the Nifty ended at 6,135, down 131 points tracking weakness across global markets. The rupee hit over two-month low against the US dollar.
Sentiments on the Dalal Street turned bearish amid a global contagion across asset class -- equities, currency and bonds. Financial turmoil in Argentina, fears of a sharper slowdown in China and expectations that the US Federal Reserve will continue to trim its bond-buying programme later this week have sparked a broad bout of risk aversion across the globe.
The rupee slipped below the key 63 per dollar mark for the first time since November 22, 2013. Deven Choksey, managing director of KR Choksey said the rupee may fall to 64 per dollar.
Tirthankar Patnaik of Religare Capital Markets told NDTV that the rupee's fundamentals have improved the most as compared to other emerging market currencies, but levels of 63.5 or 64 to the dollar cannot be ruled out.
The sharp selloff in the currency diminished any hopes of a rate cut tomorrow. That led to a plunge in the Bank Nifty, which closed 4 per cent lower. Rate sensitive realty stocks plunged 6.8 per cent, while auto stocks traded 3.33 per cent lower.
Hawkish comments on inflation from the central bank governor and a RBI panel report that recommended making taming retail inflation a priority has also pressured rate sensitive stocks over the last few days.
ICICI Bank declined 4.6 per cent while HDFC Bank fell 3.6 per cent. Tata Motors slumped 6 per cent after the automaker's managing director, Karl Slym, died on Sunday when he fell from a high floor of a hotel in Bangkok. (Read full story here)
Ranbaxy Laboratories fell 8 per cent, adding to Friday's 19.43 percent plunge, as the drug maker continues to reel after the U.S. drug regulator banned more of its products. (Read the story here)
HUL, which reported higher-than-expected profits in the December quarter, was the top Nifty gainer, up 1.7 per cent. HCL Tech was the other significant gainer, up 0.90 per cent, tracking the weakness in the rupee.
The Sensex closed at 20,707, while the Nifty ended close to its long-term support at 6,135.85.
