The Indian rupee has been quite volatile today; it was hovering around the 52 to the dollar, though it appreciated from the yesterday's closing level of 52.30.
Head of Forex & Rates Strategy for Asia, Citigroup warned that the rupee is likely to remain under pressure. Perretgreen is expecting the Reserve Bank of India (RBI) to open dollar window for oil marketing companies (OMCs) to ease the pressure.
All sectoral indices were in the red. The BSE Bankex crashed 2.5%. IT, Oil & Gas, Auto and Metal indices were down 2%.
Top losers - HDFC Bank, Jaiprakash Associates, M&M, Jindal Steel, Reliance Industries, IDFC and Sesa Goa were down 3-5%.
SKS Microfinance plunged 5% on reports that Vikram Akula may resign.
DB Realty (up 20%), Reliance Communications (up 2.5%) and Unitech (up ) rallied sharply after the Supreme Court granted bail to five corporates accused in 2G case.
On the global front, Asian markets extended losses. Taiwan, Kospi and Hang Seng lost 2.8%, 2.4% and 2%, respectively. Straits Times fell 1.5%. Nikkei was down 0.4% and Shanghai down 0.6%.
At 10:37 hours IST : Nifty below 4750; banks, oil & gas, tech tumble
Bears remained in power as they became more greedy day by day due to failure of European Unions to solve their debt crisis. Volatility in the rupee was another cause of concern for the market - it recovered to 51.88 in the opening trade from yesterday's closing price of 52.30 to the dollar but again slipped to 52.11. The 30-share BSE Sensex lost 225 points to 15,840.61 and the 50-share NSE Nifty fell 67 points to 4,745.55.
"The rupee free fall has caught market by surprise," said Suresh Mahadevan, managing director and head of Indian equities at UBS Securities. With the currency vulnerability adding to the fears over the global volatility, Mahadevan says the instability in the market is most likely to stay for over the next few months.
"The Indian market is the worst performing, globally. The market is moving towards a final leg of capitulation and on a worst case scenario there could be a 20% downside from current levels," Mahadevan cautioned.
Major largecaps like Reliance Industries, Infosys, HDFC Bank, ICICI Bank, Bharti, SBI and BHEL were down between 2% and 3%.
HDFC, TCS, Wipro, Sterlite, Tata Steel, Hindalco and Hero Motocorp lost 1-1.5%. However, Cipla and HUL were only gainers on the Sensex.
The market breadth was in favour of declines; about two shares slipped for every share rising on the National Stock Exchange.
At 9:20 hours IST : Sensex falls 200 pts on eurozone fears, Re recovers
Indian equity benchmark Sensex gave up all of yesterday's gains to slip below 16,000 in the opening trade. Nifty, on its part, broke the 4750 level. Endless eurozone fears, including selling of 3-month bills at a premium yield of 5.11% by Spain, made investors worried. With US revising its third quarter GDP downward yesterday, the sentiment has only worsened.
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