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Day 7: Sensex slide unabated, touches fresh 4-month low

After rising 215 points in early trade on positive global cues after Cyprus clinched a bailout, the Bombay Stock Exchange benchmark Sensex on Monday reversed gear on worries over domestic political developments with the index ending with a 54-point loss at 18,681.42, extending losses to seventh day.

The Sensex, which opened with a 158-point jump at 18,894.13 after European lenders agreed to a last-minute bailout for debt-ridden Cyprus, rose to to a high of 18,950.22 as buying activity strengthened. However, concerns of domestic political stability resurfaced that triggered spate of selling in capital goods, auto, metal and banking shares.

Erasing gains, the 30-stock index fell for the seventh straight session by losing 54.18 points, or 0.29 per cent to 18,681.42, its lowest level since 26 November 2012. In the seven days, the Sensex has now lost close to 890 points.

'...Indian equity market ended in the red reversing all its early gains after media reports stated that Samajwadi Party may pull the plug on the UPA government,' a note by brokerage IIFL said.

Led by L&T, SBI, ICICI Bank, Hero MotoCorp,Infosys, RIL, Bharti Airtel, GAIL and Cipla, 20 stocks in Sensex ended down.

Investors viewed Samajwadi Party chief Mulayam Singh Yadav's comments about coalition politics yesterday as a signal for early elections, said stock market experts.

The NSE Nifty lost 17.50 points, or 0.31 per cent, to end at 5,633.85, after touching day's high high of 5,718.40.Stock dealers sid the market sentiment has been low ever since the DMK withdrew support last week and RBI indicated little room for interest rate cuts. Funds were also reducing holdings ahead of monthly derivative expiry on Thursday.Globally, most Asian markets ended 0.5-2.9 per cent up and European indices were trading around 1 per cent up in early trade after Cyprus agreed to an aid package, paving the way for 10 billion euros of emergency loans to stave off the threat of default. Cyprus and its euro zone partners early today reached a deal on a 10-billion euro (USD 13 billion) bailout package for the island nation to avoid bankruptcy and to keep it within the single currency group.

The finance ministers of the euro zone nations agreed at an emergency meeting in Brussels to down size the banking sector to achieve the EU average by 2018 and to gradually dissolve the Laiki Bank, the country's second largest bank.Meanwhile, 20 scrips out of the 30-share Sensex pack ended lower and nine finished higher.


P-NOTES ACCOUNT FOR $30-BILLION FOREIGN INVESTMENTS IN JANUARY


Foreign investments into Indian markets through participatory notes (P-Notes), a preferred route for HNIs and hedge funds, stood at Rs 1.62 lakh crore (about $30 billion) in January.

According to the latest data released by the Securities and Exchange Board of India (Sebi), the cumulative value of P-Note investments in Indian markets (equity, debt and derivatives) was at Rs 1,62,139 crore at the end of January.

In December, P-Note investments in Indian markets was at Rs 1.51 lakh crore (around $28 billion).P-Notes, mostly used by overseas HNIs (High Networth Individuals), hedge funds and other foreign institutions, allow them to invest in Indian markets through registered Foreign Institutional Investors, while saving on time and costs associated with direct registrations.

 
RS RISES BY 16 PAISE AGAINST $ TO REACH ONE-WEEK HIGH OF 54.17

The rupee rose by 16 paise to close at one-week high of 54.17, following fresh selling of the US dollar by exporters amid strengthening of the euro overseas after Cyprus reached a bailout agreement with international lenders.

Forex dealers said continued capital inflows also helped the local currency.

The rupee commenced strong at 54.11 a dollar from last Friday’s close of 54.33 at the Interbank Foreign Exchange (Forex) market.

Later, it fell back in line with fall in equities at the fag end to a low of 54.24, before concluding at 54.17, a rise of 16 paise, or 0.29 per cent, from its previous close.Foreign institutional investors lapped up local shares worth USD 32.5 million (Rs 717.89 crore), according to provisional BSE data.
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