Sensex closes below 16,000, rupee breaches 56 against $

3:30 pm Its been a bad day for the markets as both the NSE and the BSE fell by 0.5 percent. The BSE Sensex closed at 15,948, down 78 points. This is the first time the markets have closed below the 16,000 mark. Sensex had closed below these levels last on 9th Jan, 2012. The S&P CNX Nifty also closed at 4,835, down 25 points. The market breath remained negative. On the NSE, 901 stocks declined while 540 advanced.

The rupee continued to haunt the markets as it dropped to a record low against the dollar. The rupee touched the symbolically significant level of 56 to the dollar. The rupee has now fallen more than 5 percent this year against the dollar to make it the worst-performing Asian currency monitored daily by Reuters. It has dropped more than 13 percent from its 2012 high reached in February.

Among the 13 BSE sectoral indices, Healthcare was the only one to close in green. The top losers were consumer durables followed by capital goods and realty. In the 30-share Sensex pack, 23 stocks closed in red. Telecom stock Bharti Aitel was the biggest loser followed by Jindal Steel and Tata Power as they fell by 2-4 percent. GAIL was the top gainer as it closed up 3.4 percent.

Heavyweight Reliance Inds also closed down at 0.35 percent after falling more than one percent during the day. The stock had fallen after one of its exploration partners Niko Resources said they have abandoned the D4 oil and gas block off India’s east coast, underlining the production problems in the region, as per Reuters.

“Markets were very volatile during the day and were under constant pressure. The sharp weakening of the rupee below the 56 / USD mark unnerved the markets, we think. Markets were also waiting for the outcome of the informal EU summit later in the day. Continuing concerns about the outcome and the potential impact on Greece, weighed on sentiments. Markets are hoping for reforms initiatives to start soon as the budget session has ended. Initiation of the reforms is a pre-requisite for the markets to stabilize and move up from the current levels, according to us.” said, Dipen Shah, Head of Fundamental Research, Kotak Securities.

Telecom stocks were in news today as they slumped on the bourses after worries of intensifying competition after Idea Cellular announced upto 70% price reduction on its 3G services. Bharti Airtel hit a 52-week low today.

Auto stocks also fell on speculation the government could raise fuel prices, adding to worries about a sector facing uncertainty about future sales and rising raw material costs because of the falling rupee.

(With inputs from Reuters)