The Hindu : Business : Sensex tumbles 491 points

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Business

Sensex tumbles 491 points

Reliance Industries plunges by six per cent

MUMBAI: Markets tumbled by nearly 500 points on Tuesday to close at two-month low after an all-round selling triggered by a steep fall in the heavyweight Reliance Industries (RIL) amid poor earnings by some corporates and sluggish global equities.

The petro-chem giant RIL, which has the maximum weight on the Sensex, plunged 5.73 per cent on reports that the Comptroller and Auditor General of India would soon audit the company’s books of accounts.

“RIL slipped on reports that CAG has set up a team to examine the expense RIL had incurred on its D6 natural gas field in the Krishna-Godavari basin,” said Geojit BNP Paribas Financial Services Head, Research Centre, Alex Mathews.

Leading aluminium maker Hindalco fell the most among the Sensex stocks by a steep 10.50 per cent following its profit sharply falling by over 52 per cent in the second quarter.

Extending losses to the sixth day in a row, the Sensex closed lower by 491.34 points at 15404.94 points, a level last seen on September 3. In straight six sessions, the Sensex crashed by 1405.87 points or 8.36 per cent.

The sentiment was also aggravated by bearish Asian as well as European markets. “Uncertainty in global market has propelled investors to book profit. Investors are now indulging in safe haven buying and are investing in dollar,” said SMC Global Vice President Rajesh Jain.

Indices from Asia like Hang Seng, Nikkei, Kospi and Taiwan Weighted ended lower between 0.17 per cent and 2.31 per cent while Shanghai Composite ended in the green. Fears over the cut in the government stimulus, mainly in the financial sectors, following positive U.S. manufacturing and home sales data, sent the world stocks to near one-month lows on Tuesday. Investors are waiting for the outcome of the U.S. Federal Reserve two-day meeting on interest rates late on Tuesday.

Poor results by some European banks, too, affected the market sentiment.

The broader 50-share Nifty of the National Stock Exchange plunged by 147.80 points to end at 4563.90 points. Selling was so strong that all sectoral indices closed with sharp to moderate losses. The BSE-Realty index was the top loser with a fall of 373.50 points, followed by the BSE-Metal by 829.49 points and the BSE-Oil & Gas by 386.52 points or 4.10 per cent.

Among the index-based shares, DLF slumped by 9.04 per cent, Jaiprakash Associates by 7.52 per cent, Sterlite Industries by 6.40 per cent, ACC by 6.20 per cent, REL Infra by 5.96 per cent, RCom by 5.71 per cent, Tata Steel by 5.51 per cent, Wipro by 4.36 per cent, SBI by 3.99 per cent and HUL by 3.60 per cent.

Rupee crosses 47-mark

Snapping a two-session rally, the rupee on Tuesday fell sharply by 44 paise to 47.40/41 against the U.S. dollar on signs of increased capital outflows amid weak domestic bourses. It closed on 46.96/97 on Monday.

Forex dealers said a firm dollar overseas against a basket of currencies also put pressure on the domestic unit. They attributed the drop in the rupee value to distinctly weak trend in the stock markets.

Sustained slide in domestic stocks raised fears of more capital outflows, they said.

In fairly active trading at the interbank foreign exchange market, the domestic unit opened slightly lower at 47.00/01 from its previous close of 46.96/97. However, it tumbled to the day’s low of 47.43 before closing at 47.40/41. Initially, it touched a high of 46.95.

Meanwhile, global crude oil fell towards $77 a barrel after the dollar rose against major currencies and stocks slipped across-the-globe.

The Reserve Bank of India, however, fixed the reference rate for the U.S. dollar at Rs. 47.04 and for the euro at Rs. 69.61. — PTI

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