Sensex ends off day's low, but continues fall for 7th day

Indian equity benchmark Sensex recovered smartly from day's low in the late trade led by short covering on Friday, but has sustained its downward spiral for the seventh consecutive session. European markets too turned positive after a fall of nearly 1% in the early trade and even the Dow Jones futures gained 61 points; it seems that the global markets priced in all negatives of eurozone now, though the crisis remains in tact.

Imran Ahmad, EM strategist at RBS says that at the moment, the matter of major concern for the global economy remains euro zone. ''Moment there doesn't seem to be a very clear solution to the eurozone crisis which could mean that we end up going back into recession in that part of the world, and that is impacting all global emerging markets,'' he says.

The 50-share NSE Nifty has managed quite nicely to get back above the 4900 level after seeing an intra-day low of 4,837.95. The index fell 28.95 points, to close at 4,905.80. Meanwhile, the 30-share BSE Sensex regained 206.5 points, before closing down 90.20 points at 16,371.51. In last seven days, the index crashed nearly 1200 points while for the week, both benchmarks dropped close to 5%.

Apart from eurozone jitters, falling rupee resulted outflow of foreign money, was the main concern for the market. The rupee was trading at 51.27 to the dollar (slipped 38 paise), and at 69.40 to an euro (lost 83 paise).

According to Imran Ahmad, the rupee will continue to underperform compared with other Asian currencies. ''Other currencies in the region are supported by positive current account surpluses,'' he explains. ''They don't have strong linkages to the euro area that India may have,'' he says.

According to a study by RBS, four countries in the EM region are most exposed from financial and trade linkages. They are- Indonesian Rupee, Korean Won, Malaysian Ringgit and the Indian rupee.