Sensex dips to six-month low, down 1.93%

Financial markets in the country reeled under war fears and worsening Indo-Pak relations for the eight successive day. The free fall of mark...

Financial markets in the country reeled under war fears and worsening Indo-Pak relations for the eight successive day. The free fall of markets continued and stocks came under heavy onslaught and fell sharply pushing the benchmark Sensex to a six-month low of 3,114 on the Bombay Stock Exchange following heightening tension at the border.

After opening on a promising note at 3,193.64, Sensex met with strong resistance and gradually moved downwards to the intra-day low of 3,106.56 before ending at 3,114.05 as against Wednesday’s close of 3,175.49, a net fall of 61.44 points, or 1.93 per cent. The broad-based BSE-100 Index dipped by 24.48 points to 1,579.76 from previous close of 1,604.24.

Gold prices down

MUMBAI: After a smart rise in the last a few days, gold prices reacted downwards on the bullion market following profit-taking and lack of buying support at higher levels. Silver also declined in the absence of adequate industrial demand.

Story continues below this ad

Standard gold dropped by Rs 20 per ten grams to close at Rs 5,270 from the overnight finish of Rs 5,290. Ten-tola gold bar also fell to Rs 61,700 from Rs 62,000. A two-day spurt in gold prices to record peaks came to a grinding halt and the yellow metal met with profit-selling.

Stockists offerings in the face of slow offtake, coupled with a lower price trend in global markets also aided the downtrend. Ready silver (.999 fineness) also fell by Rs 70 per kilo to Rs 8,17 from Rs 8,240.

Sensex has fallen by 328.44 points, or 10.55 per cent, in the last eight sessions. “There are no buyers in the market,” said stock dealer RA Podar.

Reacting to reports of shelling and firing by Pakistani troops from across the international border since Wednesday coupled with Prime Minister Vajpayee’s crucial meeting with the unified command to review the operational prepardness of the armed forces, punters and retail investors off-loaded positions heavily on war fears. Domestic financial institutions failed to support the market at this crucial juncture while foreign institutional investors were sellers in select counters, market sources said, adding “UTI and some other mutual funds were seen selling PSU stocks as well as shares of other heavyweights like RIL, HLL and ITC”. However, second-line counters moved up on stray buying support at prevailing low price levels.

Story continues below this ad

In the specified group, 117 including 24 index-based counters registered sharp to moderate losses while 49 others finished with modest gains.

Rupee hits record low at 49.05

MUMBAI: The rupee ended at a new record low against the US dollar at 49.04/05 on heavy corporate dollar demand, triggered by the mounting Indo-Pak border tension coupled with heavy dollar building by banks to adjust the longer week-end swap differences at the interbank forex market. Importers rushed to cover dollars as it rose above the 49-mark amid fears of an Indo-Pak war while the longer spot, which has shifted to Tuesday on account of Monday’s New York holiday, also prompted banks to buy greenback heavily to take advantage of weekend swap differences, dealers said.

The rupee opened on a bearish note at 49.00/01, stayed on the slippery ground on sustained dollar bidding by banks and corporates and dipped to the day’s low of 49.05/06. The Indian currency finished at a record low of 49.04/05, losing its exchange value by six-and-half paise from Wednesday’s close of 48.9750/9850. The previous record closing low of 49/0250/0350 was recorded on May 15 while the rupee touched its life-time low of 49.08 during intra-day deals on May 16.

The rupee has slid by 78 paise against the greenback in this calendar year to 49.04 from 48.26. It witnessed sharper falls against euro by 2.79 to 45.36 from 42.57, 1.76 against pound sterling to 71.62 (69.86) and 2.62 against Japanese yen to 39.36 (36.74) during the same period. Ever since the border tension started, the rupee has declined by only four paise in the last eight trading days, largely due to RBI support.

(Express News Service)