In a volatile trade, the Bombay Stock Exchange benchmark index Sensex on Friday, fell further by over 75 points on heavy selling by funds in IT stocks on worries that the rising rupee may hurt revenues.
The Sensex, which had lost 85 points in the previous session after a four-day rally, lost another 75.43 points at 17,540.29 as heavy-weight stocks in the IT, metals and refinery counters fell sharply.
Another reason for the fall was the Reliance counter that fell 0.47 per cent after news trickled in that the company has sweetened its offer to buy a controlling stake in the bankrupt American chemicals major LyondellBasell.
The key index shuttled between 17,658.12 and 17,508.96 points during the day as trading activity turned choppy on alternate bouts of trading.
After hitting a 15-month high yesterday, the rupee opened the day eight paise down at 45.75 against the dollar as the US currency strengthened against the euro and the yen. Yesterday the local currency rallied 17 paise to close at 45.67/68 a dollar.
Another reason for the fall of the local unit was the flat equity markets that provided little clarity on the direction of fund flows which put pressure on the rupee, dealers said.
Similarly, the wide-based NSE’ Nifty 50 after opening nine points up broke the psychological 5,250 mark falling 18.35 points to shut the shop for the day at 5,244.75, after moving between 5,276.75 and 5,234.80 during the session.
The rupee has strengthened 1.7 per cent against the dollar this year, the third-biggest gain among the 10 most actively traded Asian currencies excluding the yen.
A steep fall in the market leaders Reliance Industries and Infosys Technologies mainly pulled down the market for the second straight day, said brokers.
Reliance Industries fell by Rs. 3.25 or 0.47 per cent to Rs. 1,101.95 and Infosys by 2.41 per cent to Rs. 60.80 to Rs. 2,464.45. These two stocks carry nearly 24 per cent weighting on the Sensex.
Among the Sensex counters, 16 ended with losses while 14 recorded small to notable gains following a mixed trend from the overseas front. While most of the Asian markets were higher, especially the Nikkei, the European markets displayed some strength in opening trade.
However, a surge in stocks led by realty, capital goods and power segments prevented further fall in the index.
The realty sector index gained the most by 3.23 per cent after Goldman Sachs raised its view on the industry to “attractive” from “cautious.” The realty major DLF rose 4.26 per cent to Rs. 390.20. Indiabulls Realestate advanced 3.55 per cent to Rs. 227.45.
The IT index suffered the most by losing 1.98 per cent as the segment major Infosys fell by Rs. 60.80 to Rs. 2,464.45 following rise in rupee against the dollar. Software exporters get about 40 percent of sales from the US.
Following this the investors shifted their money to other sectors as a hedge, leading to a rise in Small-cap index that gained 0.44 per cent to 8,697.64 while Mid-cap index rose by 0.02 per cent to 6,946.00.