Sensex plunges 769 points; banks biggest losers

A benchmark index of Indian equities markets sank 769 points Friday as the rupee fell to a record low of 62 per dollar amid heavy selling by foreign funds.

The 30-scrip sensitive index (Sensex) of the S&P BSE, which opened at 19,297.11 points, closed at 18,598.18 points, down 769.41 points or 3.97 percent from Wednesday's close at 19,367.59 points. The markets were closed Thursday -- India's Independence Day. The wider 50-scrip Nifty of the National Stock Exchange (NSE) closed Friday's trade at 234.45 points or 4.08 percent down at 5,507.85 points.

The Sensex touched a high of 19,310.95 points and a low of 18,559.65.  Stocks of banks, consumer durables, oil and gas, metal, capital goods, automobile, fast moving consumer goods (FMCG) and public sector undertakings (PSU) saw heavy selling. At one point during the day, the Sensex had tanked over 807 points.

The S&P BSE Bank index index tanked 634.93 points, consumer durables index fell 539.31 points, oil and gas index slid 410.34 points, metal index tumbled 409.33 points and capital goods dipped 382.13 points. The other losers included automobile index which went down 259.79 points, FMCG index which dropped 258 points and PSU index slid 253.21 points.

The massive selling pressure in the stock markets was due to the high demand for the US currency. Recent industrial and employment data from the US and some major European economies like France and Germany has shown significant improvement, making these markets more attractive than India. The creation of more jobs in the US may translate into an early end to the US stimulus programme, which earlier led the US Federal Reserve to end its bond-buying programme.

“Markets capitulated after showing strength early this week. Markets started on a soft note on weak global cues but fell suddenly and sharply on continuing concerns over the depreciating rupee and tapering of the monetary stimulus by US Fed," said Dipen Shah, of Kotak Securities. The partially convertible rupee slipped to a new record low of 62.03 against the dollar at inter-bank foreign exchange market here, surpassing its previous record low of 61.80 of Aug 6. 

An absolute majority of 29 companies of the 30-sensitive index were losers. The losing companies included: BHEl, down 10.70 percent at Rs.105.95; Sterlite Industries, down 6.65 percent at Rs.75.85; Gail India, down 6.49 percent at Rs.298.25, ONGC, down 6.06 percent at Rs.271.90 and Tata Power, down 5.91 percent at Rs.73.25.

Only Hero MotoCorp emerged as the gainer in the 30-sensitive index. The company's scrip gained 2.40 percent at Rs.1,982.95.  Among the Asian markets, Japan's Nikkei closed 0.75 percent down and Hong Kong's Hang Seng ended 0.10 percent lower. Shanghai Composite Index was also lower by 0.64 percent.

 In Europe, london's FTSE 100 was trading down 0.01 percent. Germany's DAX Index was 0.20 percent lower and the French CAC 40 Index was up 0.19 percent.