Sensex closes below 17k, rupee hits record low

It was a volatile session on the markets as the weakness in global stocks hammered stocks on the bourse. Both the Sensex and the Nifty closed down 0.35 percent. The BSE Sensex closed down 60 points to 16,972, down 165 points from the day’s low. The S&P CNX Nifty also closed down 19 points to 5,146. The market breath was negative. In the 30-share Sensex, 16 closed in red. Metal companies fell sharply due to a fall in international comodity prices. Hindalco was the biggest loser with a fall of 3.3 percent followed by Tata Steel (-2.7 percent).

The rupee woes continued today as well as it hit a record low of 57 on dollar demand from oil and gold importers, and the broad risk-off sentiment.

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[caption id=“attachment_354145” align=“alignleft” width=“380” caption=“The rupee woes continued today as it hit a record low of 57 on dollar demand from oil and gold importers. Reuters”]  [/caption]

In spite of all the troubles the Indian economy is facing, there are still some who are bullish. Rakesh Arora, head of research at Macquarie Capital Securities, says that Nifty could touch 5,500 by year end despite a sagging economic growth, policy paralysis and a down turn in investors sentiment.

He further added that the market is currently undervalued because it is discounting GDP growth lower than the street consensus and because there is a change that earnings look achievable. “If interest cuts do happen slightly more aggressively, there is a chance that earnings might see support from the lower interest cost,” he told CNBC TV-18.

Stock specific news:

•Tata Power after the company said Moody’s Investors Service was reviewing the corporate rating of the company for possible downgrade.

•Cement stocks tumbled post the CCI imposes a hefty penalty of over Rs 6000 crore on eleven leading cement companies for price cartelisation.

•Tata Motors closed marginally lower by 0.56 percent. The stock was up a percent in the morning after Calcutta HC division bench rejected Singur judge order.

•Shares in Reliance Industries fell 1.2 percent on continued concerns about gas output after Canada’s Niko Resources Ltd slashed the reserve estimate at the KG D6 block on Wednesday.

•Shares of Infosys fell 0.7 percent after investment bank Jefferies says the Indian software services provider is “likely” to cut fiscal 2012/13 guidance to 6-8 percent growth from the current 8-10 percent.

(With inputs from Reuters)