Andrew L D'Cunha
Mumbai, Oct 18: The BSE Sensex tumbled 277 points on heavy selling in heavyweight stocks led by N TCS, HCL Tech, Reliance Industries and banking stocks on investor anxiety over corporate earnings amid depreciating rupee and weak global markets. Sensex fell 277 points, to close at 16,748.
Nifty dropped 81 points, to end at 5,038. Tata Consultancy Services fell nearly 8% on lower-than-expected results. HCL Tech lost 8.5% on poor result. Infosys and Wipro shed 1.6 and 3 per cent respectively. Heavyweights Reliance Industries, ICICI Bank, Infosys, L&T, ONGC, SBI, Bharti Airtel, BHEL and Wipro were down between 1.3% and 3%.
A weak trend in the Asian region and lower openings in Europe also dampened the market sentiment. Global stocks suffered huge loss after comments from Germany's finance minister caused investors to fear Europe's solution to its debt crisis may not come fast enough. German Finance Minister Wolfgang Schaeuble, speaking of an Oct. 23 European Union summit on the debt crisis, tempered enthusiasm, saying, "we won't have a definitive solution this weekend”
Asian stocks reacted badly to news that a fresh European aid plan may take longer than hoped. Hong Kong’s Hang Seng Index tumbled 4.2%, while the Shanghai fell 2.3%. Japan’s Nikkei ended down 1.6%, Chinese GDP data failed to lift investor’s sentiment.
This morning, China posted GDP data for the third quarter, and it came in at 9.1 percent year-on-year, down marginally from 9.5 percent in the second quarter and also slightly below expectations for 9.2% growth. The U.S. dollar was looking strong as the euro under renewed pressure a day after Moody’s Investors Service warned that France’s Aaa credit rating could be at risk. European stocks fell sharply reacting to the German comments on Euro-zone crises.
Despite festive season Gold fell by Rs.200 in the bullion, due to sluggish demand at existing higher levels amid weakening trend in Asia.
The Indian rupee opened at 49.08 per dollar versus 48.94 yesterday and is likely to remain under pressure on negative cues from global equity markets and partial recovery in the dollar.
Andrew L D'Cunha, Managing Director, WinWin Fin Advisory Pvt. Ltd. Mangalore. Email: finadvisoryltd@yahoo.com.