PRESS TRUST OF INDIA
Mumbai, 12 November
The Bombay Stock Exchange benchmark Sensex extended losses for the sixth straight day and fell 209 points to a one-month low today as the rupee continued to drop against the dollar before the release of industrial production and consumer inflation data.
Tata Motors, ICICI Bank and Reliance Industries were the biggest drag as 26 of the 30 shares on the index fell. Sesa Sterlite and Tata Power were among the big losers.
Metal, power and auto sector stocks led 12 of the 13 BSE group indices lower.
The 30-share Sensex resumed higher at 20,510.31 and moved in a range of 20,262.22 to 20,584.22 before ending at 20,281.91, a loss of 209.05 points or 1.02 per cent.
The index has dropped 957.45 points, or 4.51 per cent, since its peak closing of 21,239.36 in a special Muhurat session on 3 November.
The Sensex was at the lowest level since closing at 20,272.91 on 10 October.
It was the longest losing streak for the index since the eight days ended 2 August.
The 50-share CNX Nifty on the National Stock Exchange dipped 60.75 points, or one per cent, to a one-month low of 6,018.05 points.
Over the past few sessions, stocks markets have been affected by fears of Fed tapering its $85-billion a month stimulus, profit-booking by investors and rating agency S&P’s warning that India could be downgraded if the next government fails to reverse slide in economic growth.
The rupee, which fell for the fourth session yesterday, dropped further and approached the 64 level.
The rupee has plunged 209 paise, or 3.39 per cent, in five straight sessions. It is at the lowest level since closing at 63.84 on 10 September.
The rupee is just 29 paise away from 64 mark. The currency had closed below the 64-level on 21 August 2013.
“I think a crazy, irrational kind of a sentiment is (prevailing in the forex market)… Whoever is punting on rupee will loose very heavily,” economic affairs secretary Arvind Mayaram said today.
On the impact of the expected US Federal Reserve’s withdrawal of its fiscal stimulus, Mr Mayaram said: “When the taper begins, you will see nothing will happen.”
A lower rupee also increases the import bill and could fuel inflation. The rupee touched a two-month low of 63.83 per dollar before closing at 63.71 versus US dollar, down 47 paise compared with its previous close.