It's a terrible day for Indian markets, especially on the currency front as therupee has slipped past the 61 mark against the US dollar for the first time ever. It is trading at a record low of 61.10. Even the Sensex and Nifty are on a downward spiralas better-than-expected job growth datamakes the case stronger for the US Fed to taper its monetaryeasing programme earlier than expected.
Bond yields also jumped on fears that foreign investors would continue to sell rupee debt. The 10-year yield rose as much as 13 basis points to 7.63 pct from its previous close.
The dollar hit a fresh three-year high against a basket of major currencies as market expectations grew that the Fed will scale back stimulus as early as September following solid jobs growth. The dollex was firm above 84.
While the Sensex was down 200 points at 19262, the Nifty was down 76 points at 5791.
On Friday, US job growth data showed that 1.95 lakh new jobs were created in June, which was above marketexpectations.
According to analysts, encouraging job data from US may prompt the US central bank to taper its stimulus programme, which would result in foreign institutional investors pulling out from emerging markets.
"Job growth data from US is likely to put pressure on the rupee on Monday as the dollar is likely to strengthenagainst all major currencies. As an immediate reaction, rupee may further depreciate due to this," said P Paramasivam, general manager who looks after treasury operations, at Corporation Bank.
The government is reportedly moving to improve its relations with RBI ahead of a possible coordinated effort to stem the rupee's slide, says a report.Weakness in rupee will hurt India's current account deficit further.
The rupee was the worst performer among the Asian units losing 8.6 percent in the April-June quarter.
On Friday, rupee closed at 60.22 to the dollar on fresh demand of greenback from importers even as RBI had reportedly intervened to arrest the slide in the local currency. On June 26, the rupee closed at life-time low at 60.72 after touching 60.76 earlier in the day against dollar.
Last week, RBI Governor D Subbarao had said the central bank had no exchange rate target in mind but would use all theinstruments to reduce volatility in the currency.
Globally,Eurozone finance ministers will review the progress report on Greece. Portugal has patched up its fraying coalition government, and it looks like Greece will reach a deal with lenders that should ensure its bailout cash keeps flowing, says a report.
Domestically, June Consumer Price index, IIP data for the month of May and the June export and import data are what investors will check on the local front.
Infosys, Wipro and TCS are leading, whereas Tata Motors, Hindalco, Sterlite, ICICI Bank, Jindal Steel, ONGC, SBI, RIL, Tata Steel, BHEL, HDFC, Bharti Airtel, L&T and Bajaj Auto are seeing some weakness.
Only BSE IT and Teck are the gainers, whereas FMCG, Healthcare, Capital Goods, Consumer Durables, Power, Bankex, Oil & Gas, Metal and Realty are the losers.
Stocks in news
RComshares are up more than 5 percent on plans to spin off real estate business.A new company, Reliance Properties Ltd (RPL), would be spun off to unlock value. RPL will be listed separately and the existing shareholders will get one RPL share for each RCom share (of Rs 130 market price) held.