Wednesday, May 23, 2012

Markets wilt under depreciating Rupee

Benchmark share indices continue to trade in negative terrain, amid weak Asian cues, as the weakening rupee weighed on market sentiment. The BSE Benchmark index, Sensex was down 133 points at 15,893 while the Nifty shed 41 points at 4,819.
In the broader markets the Midcap and the Smallcap indices were down 0.4-0.5%, still outperforming the Sensex which shed 0.8%.
Meanwhile, the Indian currency continued to weaken to an all-time low of 55.84 against the dollar before suspected RBI intervention pulled it back in today's trades. Speaking on the currency situation, the chief economic adviser to the prime minister, Rangarajan said that direct sale of dollars by the Reserve Bank of India to state-run oil companies should not be ruled out.
Asian stocks too tumbled as Bank of Japan failed to announce any new easing measures. The major losers were Hang Seng, Nikkei, Jakarta Composite, Straits, Kospi and Taiwan Weighted which  lost 1-2%.
Back home, among the sectoral indices, Consumer durables, Auto and Power indices are the major laggards, losing over 1% each. Realty, Metal, IT, Bankex down 0.7% each were the other notable losers.
Some of the Sensex stocks which bucked the trend were Gail India, BHEL and SBI up 0.5-2%
Tata Power was down over 3%, extending its previous day’s over 5% fall, on reporting a consolidated loss of Rs 629 crore for the fourth quarter ended March 2012, due to impairment provision related to Mundra project. The company had a consolidated profit after tax of Rs 625 crore in the previous year quarter.

Maruti Suzuki,Hero MotoCorp and Jindal Steel were other losers down 2% each.
Among other stocks, SKS Microfinance tanked 5% to Rs 73.45, also its historic low market price, on reports that IRDA has found irregularities in the company’s handling of insurance of its clients.
Also, GTL Limited dropped 3% at Rs 32.50 after reporting a net loss of Rs 246 crore for the quarter ended March 2012, due to higher interest on loans.
The market breadth remained negative on the BSE as 1211 stocks declined while 94 stocks advanced.

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