VantageTrade Eagle Eye: Markets open down, rupee slumps to 55.82/$

Weakening rupee weighted negatively on the Nifty and Sensex yesterday that ended down after three-day gaining streak. The rupee hit new all time low of 55.53 in yesterday’s trading session. European markets were trading in positive terrains mainly on the back of bargain hunting but the downgrade of Japan to A+ with a negative outlook on the country's credit rating by the Fitch Ratings diminished investors sentiments. Selling pressure was observed in metal, banks and power stocks while IT stocks gave markets some support.

Nifty ended down 45.55 points today, to close at 4860.5. It touched an intraday high of 4,956.35 and a low of 4,849.90. Sensex ended down 156.85 points, at 16,026.41. It touched an intraday high of 16,366.72 and a low of 16,000.84. Rupee closed at 55.39/40.

US markets witnessed positive trading during much of the session on the back of positive US housing reports. However, stocks declined in the latter part of the trading day due to concerns about Greece and today’s European summit. The Dow Jones industrial average dipped 1.67 points, or 0.01%, to 12,502.81 at the close. But the Standard & Poor's 500 Index was up just 0.64 of a point, or 0.05%, to 1,316.63. The Nasdaq Composite Index declined 8.13 points, or 0.29%, to close at 2,839.08.

Facebook's stock kept sliding, dropping 9% to $31. The social networking company has fizzled since its long-awaited initial public offering last week at $38. Facebook sank 11% on Monday, even as the rest of the stock market rallied.

Asian stock markets opened lower today on worries about Greece while a downgrade of Japan’s credit rating and disappointing trade data weighed in Tokyo. There are reports that Greece is considering preparations to leave the euro common currency.  Japan's Nikkei 225 index was trading 1% higher at 8,614.75 and Hong Kong’s Hang Seng index was trading higher at 18,810.12, down 1.2%. South Korea's Kospi index was trading 1.3% lower at 1804.45. China's Shanghai index was trading at 2370, down 0.1%.

Indian markets opened around 0.4% lower today influenced by global sentiments due to the turmoil in Euro zone. The Indian rupee is also not showing any sign of recovery and is consistently hitting new lows. The partially convertible fell as much as to 55.82 to the dollar. Also losses in oil and gas producers, FMCG, power and select technology stocks drove the markets down.  Nifty opened 17.5 points down at 4,843 while Sensex opened at 15,995, down 31 points.

Auto stocks continued to fall as falling rupee may increase royalty payments and import cost for these companies. Maruti, Hero MotoCorp and Bajaj Auto tumbled 1.6-2%. Technology stocks Infosys and Wipro were moderately down whereas TCS was flat, even after depreciation in rupee. Tata Power lost 3.5% after the company reported net loss at Rs 629 crore for the fourth quarter of FY12 as against profit of Rs 625 crore YoY.

BHEL, Tech Mahindra and Tata Global are among companies presenting their results today.

Benchmark oil for July delivery was down 50 cents to $91.35 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell $1.01 to settle at $91.85 in New York yesterday.

Other Economic and Political News:

-        Rupee crashes to new low amid calls for special bond sale

-        Law Ministry wants government to fix gas price

-        India's economic growth to quicken in 2013 – OECD

-        Bill seeking interest rate cap on micro finance lending introduced in Parliament

-        RIL ropes in Phillips 66 technology for Jamnagar plants

-        Genpact inks finance, accounting deal with Dr. Reddy's

-        Apollo Tyres expands capacity of South Africa units by 20-30%

-        Piramal completes Phase-I trials of new cancer molecule

 

 

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