Sensex at day's low; signs of foreign buying fatigue emerge in markets

The Indian equity markets are trading at the day’s low with the Sensex down 305 points at20324 and the Nifty down 95 points at 6027 afterUS Fed chief Ben Bernanke dropped a bombshell, indicating that the withdrawal of easy money could happen this year itself .

Minutes of the FOMC meeting, released late yesterday, state: “US Fed generally expected that economic data would prove consistent with the committee’s outlook for ongoing improvement in labour market conditions and would thus warrant trimming the pace of purchases in coming months.”

The rupee to fell to 62.85/86 versus its previous close of 62.57/58, after earlier hitting a session high of 62.97.

The RBI spotted intervening in early trade after the rupee fell in line with other Asian currencies. Traders warn continued weakness could spark more intervention from the central bank.

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After pumping in around $6 billion in Indian cash shares since late August, foreign institutional investors (FIIs) are slowing their pace of purchases.

[caption id=“attachment_1236385” align=“alignleft” width=“380”]  Foreign trade. Reuters[/caption]

FIIs bought shares worth Rs 80 crore on Wednesday, compared with more than Rs 100 crore each on Monday and Tuesday.

Some traders also cited heavy basket selling by foreign investors in the Nifty, meaning sales of entire batches of shares by investors in the last half hour of trading on Wednesday.

Overseas investors also sold stock futures worth Rs 650 crore over the previous two sessions as per regulatory and exchange data.

With inputs from Reuters