Weak Rupee haunts Dalal Street; Nifty ends below 5200

The benchmark index Nifty closed below 5200 mark on weak rupee. Reports of unemployment in Europe surging to a record high in fifteen years also led to jittery sentiments across the globe.

The Indian rupee hits fresh four-month low of 53.45 before RBI intervened yet again to stem the fall. Dollar purchases from oil importers, foreign banks pushed up USD/INR pair.

The RBI likely sold dollars in the foreign exchange market at around 53.45 rupee levels, three traders said, after the local currency touched a four-month low earlier in the session. The dollar rose to an intraday high of 53.4550, before being pulled back to 53.39/40 levels.

The Sensex closed at 17151.19 down 150.72 points or 0.87% and the Nifty ended at 5188.40 down 50.75 points or 0.97%. The breadth of the market turned negative. About 1048 shares advanced, 1713 shares declined, and 658 shares remain unchanged.

Sectoral Performance

The Bank Nifty logged its first decline in four sessions, after the RBI issued guidelines on capital ratios tied to the upcoming Basel III regulations.

Sugar stocks inched up and closed with decent gains after Government announced as of now, to free sugar exports from any quantity restrictions.

Top gainers on the Nifty were HUL, Asian Paints, TCS, Wipro and HDFC Bank. Top losers on the Nifty were Hero Motocorp, Axis Bank, Bank of Baroda, IDFC and Maruti Suzuki.

Hero Moto in reverse gear

Hero MotoCorp falls 7.4% after missing earnings estimates and on worries about the impact from the expiration of a state tax exemption it currently enjoys in Haridwar.

Rupee to slide more?

USD/INR broke above minor resistance at 53.25, the top of the channel from the gains since early March. Next immediate resistance is at 53.51, the December 29 high.

Europe strong ahead of ECB meet

European shares rose while the single currency languished near 10-day lows on Thursday as investors waited to see if a gloomier economic outlook would prompt the European Central Bank to hint at further stimulus measures at a policy meeting.

Investing in Gold gets expensive

Gold traders in India, the world's biggest buyer of bullion, were on the sidelines on Thursday as a weak rupee, which hit its lowest level in four months, outweighed weak sentiment in the overseas markets.

Cues to Watch

Tomorrow, FM Pranab Mukherjee may reply to the finance bill, leading to final budget process. Any important announcements and decisions regarding GAAR and the retrospective changes in the tax laws could affect the short term trend of the market. Keep an eye on ECB policy meet outcome.