Bourses wilt under rupee, Greek woes

Bourses wilt under rupee, Greek woes

Sensex sinks to 18-week low, tanking 298 points

Bourses wilt under rupee, Greek woes

Key benchmark indices, on Wednesday, slumped after after the rupee fell to an all-time low and the political uncertainty in Greece dampened investor sentiment.

Greece failed to form a government, thereby setting the stage for a June election which could raise the risk of Athens abandoning the euro and deepening the euro zone’s debt crisis.

Back in India, the rupee tumbled 67 paise to all-time low of Rs 54.46 against the US dollar on the forex market during the mid-session this day on increased capital outflows and strong demand from importers.

The barometer index of BSE Sensex reached its lowest closing level in more than 18 weeks, though it regained the psychological 16,000 mark after alternately moved above and below that level in intraday trade. The 50-unit index of NSE too reached its lowest closing level in nearly 18 weeks.

The market breadth was weak with all 13 sectoral indices on BSE were in the red. Index heavyweight Reliance Industries (RIL) declined in choppy trade. Auto major Tata Motors tumbled over 7 per cent after it reported flat global sales in April 2012 and also on euro-zone debt worries. Hindalco hit 52-week low as it gave a pessimistic future outlook at the time of announcing its Q4 March 2012 results. Steel major Tata Steel declined on euro-zone debt worries.

Domestic shares slumped in early trade to hit their lowest level in more than 18 weeks on weak Asian stocks.  Weakness continued in mid-morning trade amid volatility which continued as key indices weakened once again after trimming losses in mid-afternoon trade. However, the market trimmed losses in late trade.

Kotak Securities' Sanjeev Zarbade said: “Equities plunged and the rupee hit a fresh record low as markets globally felt the tremors of the political upheaval in Greece whose possible exit is resulting in rise in risk aversion. Capital is moving from risk assets to safe assets like the USD, thereby resulting in the USD rallying against global currencies. India has its own set of issues including a decelerating economic growth and stubbornly high inflation.”

The popular Sensex at BSE tumbled 298.16 points or 1.83 per cent to settle at 16,030.09, its lowest closing level since January 9, 2012. It slumped 353.65 points at the day's low and fell 195.57 points at the day’s high.

The S&P CNX Nifty at NSE shed 84.55 points or 1.71 per cent to settle at 4,858.25, its lowest closing level since January 12, 2012. The index hit a low of 4,837.05 and a high of 4,882.25 in intraday trade.

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