Concerns regarding winding down of the $85-billion-a-month quantitative easing (QE) programme by the US Federal Reserve, or the US Fed, coupled with a weakening currency (rupee) back home has sent the benchmark indices tumbling 6.4 per cent, or 1,301 points, from its 52-week high of 20,444 (S&P BSE Sensex) hit on May 20, 2013.

This three-week slide has seen 367 stocks (98 from BSE 500, including Tata Power, Tata Steel, Tata Communications, HPCL and Bombay Dyeing) hit their respective 52-week lows on Tuesday on the BSE on concerns a weakening rupee may leave little room for the Reserve Bank of India (RBI) to cut interest rates.

The INR fell to a record low of 58.99 against the US dollar in intra-day deals, deepening worries about the widening current account deficit (CAD) and the outlook for the economy.

Says Nikhil Vora, managing director and head of research at IDFC Securities: “The rupee weakness is a major concern for the markets. The new level/base for the INR has moved away from 52-53 and is now closer to 55-57 levels. I don’t see it moving above 60 levels in the next six months.”

Metals melt
Among sectoral indices, the S&P BSE Metal index touched a one-year low – slipping 28 per cent so far in calendar year 2013, while the S&P BSE Power index is just two per cent shy of its 52-week low.

For more visit: Business Standard

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