Sensex sheds nearly 1,000 points since Diwali, Rupee also slips

Sensex down almost 1,000 points since a cracker of a Diwali; Rupee to touch 64-mark.

Mumbai: Indian markets are fast losing their fizz with the benchmark Sensex down almost 1,000 points since a cracker of a Diwali and the rupee heading towards the 64-mark against the dollar, a level not seen since August 21.

Continuing its freefall for the sixth day in a row, the Sensex slid 209 points on Tuesday at a one-month low of 20,281.91 before the release of industrial production and consumer inflation data.

It has shed over 957 points since ending at the record close of 21,239.36 on November 3.

Over the past few sessions, stocks markets have been affected by fears of Fed tapering its USD 85 billion a month stimulus, profit-booking by investors and rating agency S&P's warning that India could be downgraded if the next government fails to reverse slide in economic growth.

Similarly, the rupee closed down 47 paise at a fresh two-month low of 63.71 amid bearish local equities and demand for the US currency from importers.

The rupee has plunged 209 paise, or 3.39 per cent, in five straight sessions. It is at the lowest level since closing at 63.84 on September 10.

The rupee is just 29 paise away from 64-mark. The currency had closed below the 64-level on August 21, 2013.

"I think a crazy, irrational kind of a sentiment is (prevailing in the forex market)... Whoever is punting on rupee will loose very heavily," Economic Affairs Secretary Arvind Mayaram said on Tuesday.

On the impact of the expected US Federal Reserve's withdrawal of its fiscal stimulus, Mayaram said, "When the taper begins, you will see nothing will happen."

The Indian currency started declining last week as oil refiners resumed part of their dollar purchases from the market, Mayaram had earlier said.

After markets closed, government data showed retail inflation entered double digits at 10.09 per cent in October while industrial production rose 2 per cent in September.

"Continuing concerns over the Fed taper, rupee depreciation, high bond yields and expectations of a sustained high CPI inflation number were the reasons for the fall," said Dipen Shah, Head of Private Client Group Research, Kotak Securities.

( Source : PTI )
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