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Slow ‘reforms’ prompt foreigners to bleed Sensex by 630 points

After two sessions of rally, the benchmark BSE Sensex on Tuesday plunged by 630 points to end below the 27,000-mark on across-the-board selling over concerns that key reform bills may get delayed, while weakness in global bond markets also hit sentiment. Foreign investors’ worries continue to bog market despite government’s move to assuage their taxation issues, traders said. 

Moreover, rupee falling below the 64-mark against the dollar also too weighed on sentiments, they added. “The recent phase of range-bound correction is led by FIIs, in spite of setting up a high-level committee to decide MAT issue. Factors like increase in Europe bond yield...currency depreciation is impacting global inflows,” said Vinod Nair, Head-Fundamental Research at Geojit BNP Paribas Financial Services. Moreover, Goods and Service Tax (GST) amendment bill and the land acquisition bill, which got stuck in Rajya Sabha, raised fears of delay in government’s economic reforms. 

Participants were also cautious ahead of the release of retail inflation data for April and IIP data for March. Globally, volatility in the bond markets weighed on global stocks, adding to investors’ anxiety over Greece’s finances. Ten-year US Treasury yields hit their highest since early <g data-gr-id="15">December,</g> while German yields added 8 bps to 0.67 percent. 

'Rs snaps two-day gains, slides by 32p against $
Snapping its two-day rising streak, the rupee on Tuesday tumbled by 32 paise to close at 64.17 on fresh dollar demand from importers and some banks ahead of the inflation data and the IIP data. Fresh fall in <g data-gr-id="44">equity</g> market also affected the market sentiment. A weak dollar overseas amid renewed capital inflows, however, restricted the rupee’s fall to some extent, a forex dealer said.
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