Markets Gloomy Over Rupee Downfall
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The last fortnight saw the rupee breaking new lows with every passing day as it also surpassed the psychological barrier of Rs 61/USD to touch Rs 61.21/USD on July 8. The INR has reached such a level that the direction of the economy and ultimately of the barometer of the economy (Sensex) is being decided by the rupee movement. The market movement has been fluctuating with the rupee. This clearly depicts the inability of the Indian financial machinery to arrest the volatility in the INR and correct the overall imbalance and confusion in the global markets. Owing to this, the Indian bourses are swinging in a directionless manner.
In the last fortnight, the BSE Sensex opened weak at 18716 points on June 27 and fell enormously to touch its lowest level of 18688 points due to unabated selling by FIIs during intraday trade. Some fresh purchasing came in later with the RBI’s and SEBI’s intervention to stabilise the rupee, resulting in a sudden spurt in the Sensex. It was at the fortnight’s highest level at 19640 points on July 5 and closed positively at 19294 points on July 10, gaining 578 points.
| Snapshot |
|---|
| | Date | Sensex | Nifty |
|---|
| Open | 27-06-2013 | 18716.1 | 5647.95 |
| High | 05-07-2013 | 19640.3 | 5904.35 |
| Low | 27-06-2013 | 18688.3 | 5630.95 |
| Close | 10-07-2013 | 19294.1 | 5816.7 |
| Gain For Fortnight | | 578.01 | 168.75 |
| % Change | | 3.09 | 2.99 |
On the other hand, the NSE Nifty opened low at 5647 points on June 27 and went on to gain some points till July 5. It touched its highest level of 5904 points on the same day. The index gained almost 168 points on July 10 to touch the level of 5816 points.The selling by both FIIs and mutual funds was a focal point of the fortnight. Since June 27, FIIs sold total shares worth of Rs 624 crore and made a huge intraday purchase of Rs 1211 crore on July 1. The Indian MFs also joined the bandwagon and sold equities worth Rs 222 crore. The combined turnover of the BSE and the NSE remained range-bound between Rs 11973 to Rs 16645 crore.
On the global front, majority of the indices consolidated from their earlier losses owing to the tapering of QE3 stimulus by the US Fed. The US Dow consolidated with a 2.54 per cent rise while Japan’s Nikkei gained a whopping 11.60 per cent during the last 15 days, followed by UK’s FTSE, China’s Shanghai Composite and Taiwan Weighted gained 5.64 per cent, 2.93 per cent and 1.66 per cent respectively. In sharp contrast to this, Brazil’s Bovespa was the only loser with a 4.37 per cent drop.
The stocks that pulled up the Sensex include TTK prestige with a rise of 26.84 per cent followed by Jaypee Infra with 24.33 per cent gains. Other gainers consist of Reliance Power, United Breweries and RCom with gains of 23.71 per cent, 23.62 per cent and 23.25 per cent respectively.
Gitanjali Gems, MMTC, GMDC, JP Hydro and Stride Arcolab were the main losers of the fortnight with a decline of 37.06 per cent, 33.44 per cent, 12.07 per cent, 10.66 per cent and 9.77 per cent correspondingly. Considering the present outlook for the economy and the volatility in the rupee, no positive news is expected to come in either from the domestic platform or from overseas. The high-CAD countries like India, Brazil, South Africa etc. are the worst hit. Market sentiments are also not very optimistic considering the flushing out of foreign funds. The best strategy for investors would be to maintain a distance from the trading activity.
| Index | Country | 27-Jun | 10-Jul | % Change |
|---|
| Dow | US | 14921.3 | 15300 | 2.54 |
| Shanghai | China | 1950.01 | 2007.2 | 2.93 |
| Hang Seng | Hong Kong | 20456.5 | 20683 | 1.11 |
| Nikkei | Japan | 12968.7 | 14472.9 | 11.6 |
| FTSE | UK | 6165.5 | 6513.1 | 5.64 |
| Dax | Germany | 7945.92 | 8057.75 | 1.41 |
| Seoul Composite | S Korea | 1809.55 | 1830.35 | 1.15 |
| Bovespa | Brazil | 47135 | 45076 | -4.37 |
| Taiwan Wtd | Taiwan | 7841.32 | 7971.18 | 1.66 |
| STI | Singapore | 3133.94 | 3178.63 | 1.43 |