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Sensex recovers from early lows

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Buying by domestic funds, overseas investors minimises losses

MUMBAI: Worries that Greece's financial crisis might spread to other euro zone nations sent the Bombay Stock Exchange sensitive index, Sensex, tumbling on Wednesday, but buying support from domestic funds checked the fall to just 49 points.

The BSE 30-share Sensex ended at 17087.96, down by 0.29 per cent or 49.18 points. In intra-day trade, the index had plunged 279 points to a near two-month low of 16858.23. The market opened low, but buying by domestic funds before close checked the losses.

European markets were trading down as concerns spread that Greece's debt woes would spread to other euro zone nations. Spain fuelled this fear by acknowledging that its financial markets were “complicated.”

Brokers said recovery was also on account of support from overseas investors. Despite a weak market on Tuesday foreign institutional investors (FIIs) put in Rs. 63.40 crore in the Indian stock market through the IPO route. Jaypee Infra's IPO closed on Tuesday.

“Market is looking for reasons to correct after the recent rally has taken the equity markets ahead of their valuations,” Reliance Securities said. “The liquidity and higher risk appetite had fuelled the rally, which is now getting punctured by immediate concerns continuing, even after the resolution, related to European debt crises,” it added.

Metal stocks continued to fall amid concerns that monetary tightening in China would cripple demand for metals. Sterlite Industries slid 3.28 per cent to Rs. 749.65 and Tata Steel 0.92 per cent to Rs. 573.20. However, Hindalco recovered and ended higher by 0.61 per cent at Rs. 163.90.

Sharp fall in rupee

The rupee on Wednesday depreciated sharply by 32 paise to close at more than one-month low of 44.93/94 against the U.S. currency on dollar buying by banks and corporates amid stronger greenback overseas. It closed at 44.61/62 on Tuesday.

In line with the weakness in domestic equities, the rupee touched an intra-day low of 45 a dollar, level not seen since March 31, 2010. It, however, recovered some losses later but still ended lower for the third straight session at 44.93/94. — PTI


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