Sensex tumbles, gold vaults as foreign investors churn markets
20 Jun 2013
Indian stocks nosedived and gold gained as the churning of the markets by foreign investors continued to hammer the rupee, pushing it to a historic low near 60 to a dollar (See: Rupee hits new low of 60 as US set to end stimulus). Stocks fell as FIIIs offloaded heavily in the market to buy again at low prices and gain a profit in the bragain.
At 1.05 pm, the 30-share BSE sensitive index (Sensex) was down 381.49 points (1.98 per cent) at 18,864.21 and the 50-share NSE Nifty was down 124.05 points (2.13 per cent) at 5,698.20.
The sectoral indices were also in the red with realty, metal, banking and power stocks coming under heavy selling pressure and were down 4.52 per cent, 4.21 per cent, 3.28 per cent and 2.53 per cent, respectively.
The rupee plunged 130 paise to hit a life-time low of 60 against the US dollar in early trade against the previous close of 58.71 on the interbank foreign exchange market today.
This along with persistent capital outflows of foreign funds also affected rupee sentiment.
The rupee was trading weak by 111 paise at 59.92 against the dollar in the afternoon session amidst heavy demand for the US currency from banks and oil importers.
The rupee had earlier hit its all-time intra-day low of Rs 58.98 on June 11.
While US Federal Reserve chairman Ben Bernanke's statement that the US central bank would sooner or later cease pumping money into the system might have affected market sentiment in the US, the mayhem in the Indian market has been brought about by the country's galloping imports and withdrawal of foreign funds from the country's equity and debt markets.
Meanwhile, European and most Asian stocks tumbled to nine-month lows as a contraction in China's manufacturing index as represented by the purchasing managers' index dampened global sentiment.
US stocks had tumbled more than one per cent on Wednesday as the dollar advanced broadly on the back of the rising bond yields.
The Fed's restating its earlier position on ending the stimulus, Indian restarted gold buying on fears of a further rise in prices, which sent gold prices higher.