Indian markets hammered in FII sell-off

MUMBAI, July 8 (Business Standard): Markets slumped this Monday as overseas investors sold away shares in the emerging markets and shifted stance to the developed economies like US after robust jobs data.

The 30-share Sensex dropped 171.05 points at 19,324.77 and the 50-share Nifty declined 56.35 points at 5,811.55 levels.

Global investor sentiments also remained edgy amid fear that the Federal Reserve Chairman Ben Bernanke may start tapering off the bond-buying programme popularly known as 'quantitative easing' sooner-than-expected as US economy shows sustainable signs of recovery.

The Fed may trim its monthly bond purchases by $20 billion to $65 billion in September, a Bloomberg survey showed.

Hopes of growth recovery in US gained prominence after non-farm payroll data showed 195,000 jobs were created last month, better than the 165,000 expected last Friday.

Meanwhile, the rupee fell to a record low on Monday, forcing the RBI to come to its defense, while bond yields surged, highlighting the vulnerability of a country dependant on capital inflows to fund its big current account deficit.

The currency is currently trading at Rs 60.85 after earlier hitting a record low of 61.21.

Technology, IT, capital goods indices gained while PSU, realty, oil and gas, bankex sectors dropped on the BSE.

The key gainers included counters such as Wipro rising 1.5 per cent, Sun Pharma gained 0.7 per cent, Infosys added 0.8 per cent, BHEL was up 2.3 per cent on the BSE.

The laggards included names like ONGC falling 3.5 per cent, Tata Motors declined 2.7 per cent, HDFC shed 3 per cent, GAIL was down 2.6 per cent on the BSE.

The key notable movers included counters such as Tata Motors which dropped 2.7 per cent at Rs 288 on reports that the production line at Jaguar Land Rover (JLR) facilities in the UK may get impacted after delivery workers from DHL voted for a strike.

Reliance Communications (RCom) surged nearly 7.2 per cent to Rs 145 in otherwise weak market after the company said that its board of directors had given in-principle approval to demerger of the company's real estate assets into a separate company to lower debt.

ITC is trading higher by 1.4 per cent at Rs 347, extending its 5.3 per cent rally in past three trading sessions, on reports that the cigarette maker has hiked the prices of Gold Flake, its largest selling brand by over 7 per cent.

Alembic Pharmaceutical has rallied 12 per cent to Rs 164 on back of heavy volumes. The stock opened at Rs 148 and hit a record high of Rs 167 on the Bombay Stock Exchange (BSE).

The broader markets traded lower with mid-caps and small-caps shedding 0.1-0.3 per cent on the BSE.

The market breadth was negative. Out of 2,431 stocks traded so far, 1,260 stocks declined while 1,057 advanced on the BSE.
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