WEAKNESS PERSISTS

Weakness has burgeoned at Dalal Street, with barometer gauges increasingly drifting lower into the red terrain. Broad based selling pressure has incited stagnation for 30 scrip sensitive index, Sensex, which currently is hurling below the long withheld 16,000 psychological level. While the widely followed index, Nifty, too is whirling around the 4800 level, with an evident cut of over half a percentage points. Additionally, broader indices too have succumbed to the selling pressure. Investors are increasingly abandoning shares belonging from the Consumer Durable, Realty and Auto counters, leading the mammoth losses of over a percent for the respective pivotal's.

The continued suffering for the beleaguered Indian currency is making way for second straight session of losses for the bourses, after the drastic drubbing in the previous session. Continuing its losing streak for the sixth session in a row, Rupee has crashed to a new low of 55.82 against the U.S. dollar in early trade due to relentless capital outflows amid a brewing demand for the American currency by importers, especially oil refiners.

Meanwhile, lack of upside trigger from global equity markets, was also adding to the pessimistic milieu. Asian markets were declining across board after Fitch Ratings lowered Japan's credit rating and also amidst growing skeptics about whether Greece was making contingency plans for a Euro exit. Meanwhile, the US future indices were showing sharp downtick in the screen trade.

The BSE Sensex is currently trading lower by 98.78 points or 0.62% at 15,927.63. The index has touched a high and low of 15,995.14 and 15,911.16 respectively.  There were 5 stocks advancing against 25 declines on the index. The overall market breadth on BSE remained in the favour of declines which thumped advances in the ratio of 1167:732, while 105 shares remained unchanged.

The broader indices too incurred losses; the BSE Mid cap and small cap indices were trading lower by 0.62% and 0.40%.

Selling pressure was witnessed across the board; however, the prominent losers were Consumer Durable down by 1.88%, Realty down by 1.19%, Auto down by 1.09%, Power down by 1.04% and Health Care down by 0.66%.

Few top gainers on the Sensex were GAIL India up by 2.90%, BHEL up by 0.67%, SBI up by 0.63% and Cipla up by 0.05%.  On the flip side, Tata Power was down by 4.20%, Hero MotoCorp down by 2.46% Maruti Suzuki down by 2.36%, Jindal Steel down by 1.98% and Bajaj Auto down by 1.88% were the top losers on the Sensex.

Meanwhile, the rupee has fallen to record levels against the dollar breaching the psychological mark of Rs 56. It is the worst performing currency in Asia and has been falling since the last fortnight despite the RBI's intervention by selling dollars in the forex market.

As per the Finance Minister Pranab Mukherjee, the fall in the rupee is related to the global uncertainties and the crisis in the euro-zone. The crisis has reduced India's exports, widened the trade and current account deficits and reduced capital inflows. This has led to a fall in the rupee accompanied by a fall in the stock markets and a slowing down of domestic growth.

C Rangarajan, Chairman of the PMEAC, has supported the view. He is of the opinion that the fall in rupee is the result of an exaggerated perception of the uncertainty and risks which has led to decline in capital inflows. As per him it is important that efforts be made to improve investor sentiment. Also the RBI should intervene to arrest the fall in rupee and millennium bonds would be a good option.

However, there are some who believe that the fall in rupee is due to domestic factors. It is believed that the fall in the rupee is due to the wide current account deficit and the uncertain macroeconomic policies of the government. It is believed that the RBI intervention may stop the fall in the rupee temporarily; however foreign money will not come into India unless the government clears the domestic problems.

The S&P CNX Nifty is currently trading lower by 28.85 points or 0.59% at 4,831.65. The index has touched a high and low of 4,848.10 and 4,824.30 respectively. There were 8 stocks advancing against 42 declines on the index.

The top gainers of the Nifty were GAIL up by 3.15%, BHEL up by 0.91%, IDFC up by 0.76%, SBI up by 0.65% and Cairn India up by 0.62%.

On the flip side, Tata Power down by 4.15%, Maruti Suzuki down by 2.21%, HeroMoto Corp down by 2.04%, Jindal Steel down by 1.97% and Ambuja Cement down by 1.93% were the major losers on the index.

All the Asian equity indices were trading in the red; Shanghai Composite eased 0.56%, Hang Seng Index plummeted 1.83%, Jakarta Composite plunged 1.37%, KLSE Composite declined 0.39%, Nikkei 225 slumped 1.83%, Straits Times Index sank 1.25%, KOSPI Composite Index shrank 1.34% and Taiwan Weighted drifted lower by 1.73%.