The Sensex today dropped by 129 points to end at 17,391.98 — its lowest closing in over a week — on fresh weakness in rupee, monsoon concerns and expectations of subdued corporate earnings. In line with Asian indices, the BSE benchmark index opened with losses as investors interpreted the recent US jobs data and lower inflation in China as signs of a slowing world economy. Across-the-board selling started after the rupee touched a one week low of 56.07 a dollar intra-day.
A lower opening in Europe extended the weak trend in India and the Sensex closed at 17,391.98, down 129.14 points. It had last closed at a lower level on June 28 (16,990.76.) As many as 27 constituents led by Hero MotoCorp, Tata Steel, Bajaj Auto and Tata Power of the 30-share Sensex closed lower while only TCS, Dr Reddy and Hindalco closed up. The Nifty fell 41.80 points, or 0.79 per cent to 5,275.15. Shares of metal, power, capital goods, auto and realty sectors fell sharply on heavy selling with market breadth being weak as 1,772 stocks out of 2,971 traded ended lower.
Experts feel investors are worried over the April-June earnings which will start pouring in from later this week. “Expectations from results are not very high in our view,” said Dipen Shah, Head-Fundamental Research, Kotak Securities. Traders said worries over monsoon fuelled speculation about scarcity of foodgrains and price rise. Brokerage Emkay Global estimates that a 10 per cent deficient monsoon will imply 3.7 per cent contraction in foodgrain production. Prime Minister’s Economic Advisory Council chief C Rangarajan in New Delhi said RBI will find it difficult to cut interest rates if inflation does not soften. Key indices in China, Hong Kong, Indonesia, Japan, Singapore, South Korea and Taiwan fell by between 0.8-2.37 per cent while Germany, the UK and France in Europe were also trading lower in afternoon deals.
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