Sensex recovers from two-year low but closes 365 points down

November 23rd, 2011 - 6:51 pm ICT by IANS  

Sensex Mumbai, Nov 23 (IANS) Spooked by a weak rupee and global economic turmoil, traders sold in droves at Indian equities markets Wednesday. A key index recovered after falling 586 points intra-day to a two-year low, and closed 365 points lower.

The 30-scrip sensitive index (Sensex) of the Bombay Stock Exchange (BSE), which opened lower at 15,969.6 points, closed at 15,699.97 points — down 365.45 points or 2.27 percent from its previous close at 16,065.42 points.

The Sensex had slipped 586.31 points to the day’s low at 15,478.69 points around noon.

The 50-scrip S&P; CNX Nifty of the National Stock Exchange also ended in the red, 105.9 points or 2.2 percent lower at 4,706.45 points.

Broader markets Wednesday also closed lower with the BSE 500 index down 2.12 percent. The BSE midcap index ended 2.05 percent lower, while the BSE smallcap index was down 1.72 percent.

The weak rupee continued to weigh on investors ahead of the derivatives contract expiry Thursday. Negative sentiments continued to surround the currency with the rupee trading at 52.18 to a dollar around 4 p.m.

The rupee had fallen to a record low of 52.73 to a dollar Tuesday but recovered by close of the day.

The Reserve Bank of India is apparently intervening to stem the rupee’s fall as state-run banks were reported selling dollars.

Indian equities markets have been among the worst performing bourses this year with sentiments of domestic investors dampened by rising interest rates, slowing growth and high inflation.

Foreign investors on the other hand also had to contend with a debt crisis in Europe and sluggish economy in their own markets, resulting in them pulling out from Indian markets to other destinations which are giving better returns.

Talking to reporters in New Delhi, Finance Minister Pranab Mukherjee said withdrawals by foreign institutional investors and weakness in rupee have led to the recent slump in the Indian stock markets.

There was only one gainer on the 30-scrip Sensex: NTPC, up 0.58 percent at Rs.156.65.

Major losers included Jaiprakash Associates, down 5.05 percent at Rs.60.20; HDFC Bank, down 3.85 percent at Rs.426.70; Bharti Airtel, down 3.7 percent at Rs.364.85 and Wipro, down 3.17 percent at Rs.365.05.

“Indian markets are now showing sign of fatigue as the weakness in the local currency, lower demand locally and globally is expected to hit corporate profitability and macro economic growth,” said D. K. Aggarwal, chairman of SMC Investments and Advisors.

Asian markets closed lower as data from the US showed weaker-than-expected economic expansion in the US. Also provisional data from China showed manufacturing sector slowing.

The Japanese markets were closed on account of a holiday. Hong Kong’s Hang Seng closed 2.12 percent lower at 17,864.43 points.

The Chinese Shanghai composite index ended 0.73 percent down at 2,395.06 points.

European markets, were under pressure as fears of a credit rating downgrade for France intensified. Also slowing Chinese manufacturing growth worried investors already bogged down by the debt crisis in the Euro zone.

Britain’s FTSE was ruling 0.61 percent down at 5,175.26 points and the German DAX was trading 0.71 percent lower at 5,498.23 points.

The French CAC 40 was ruling 0.58 percent down at 2,853.89 points.

Related Stories

Tags: , , , , , , , , , , , , , , , , , , ,

Posted in Business |