Another big fall: Profit booking, fears of reforms delay pull Sensex down 470 points; rupee falls

The Indian equity market nosedived today on concerns that reforms may take longer than expected to roll out and also as investors booked profits after two days of rally. The market is also jittery ahead of the release of two key data points, Index of Industrial Product and CPI Inflation later in the day. At 11:09 am, the benchmark 30-share index was trading 468.65 or 1.7 percent lower at 27,038.65, with all the sectoral indices led by banking, realty and auto trading in the negative zone, with losses up to 1.80 percent. The gauge had rallied 908.19 points in the previous two sessions on the back of government’s move to assuage overseas investors’ taxation concerns and hopes of an RBI rate cut. [caption id=“attachment_2239630” align=“alignleft” width=“380”] Reuters[/caption] Similarly, the Nifty fell below the 8,200-mark by plunging 155 points, or 1.87 percent, to 8,169.30. The rupee too snapped a 2-day winning run and fell 38 paise to 64.23 against the dollar, in tandem with local equities amid fresh dollar demand from importers and some banks. A weak dollar overseas amid renewed capital inflows, however, restricted the fall to some extent, a forex dealer told PTI. On Monday, the rupee closed at 63.85. Prabodh Agrawal, president and head of research at IIFL Institutional Equities told CNBC-TV18 that weak earnings, erratic rains and tax demand on FIIs were the reasons for the recent decline. He, however, believes there is unlikely to be a 10 percent correction predicted by many as the Nifty valuations at current levels are reasonable. He expects corporate earnings to grow 18-19 percent this year, because of the low base last year. Hero Moto Corp (up 4 percent), Dr Reddy (2 percent), Coal India (0.6 percent) and Bharti Airtel (0.1 percent) were the only Sensex stock trading in the green. Top losers included Vedanta (down 5 percent), Tata Steel (4.5 percent), ICICI Bank (3.2 percent), and BHEL (3 percent). A weak trend in other Asian markets, weighed down by uncertainty over the Greek debt deal, too, dampened trading sentiment here, dealers said. Among other Asian markets, Hong Kong’s Hang Seng was down 0.19 per cent while Japan’s Nikkei shed 0.62 per cent in early trade today. The US Dow Jones Industrial Average ended 0.47 percent lower in yesterday’s trade. With inputs from PTI