Stock markets slip into the red

Mumbai, Apr 17: After two consecutive days of rally, the Sensex today plunged into the red shedding 88.54 points on the Bombay Stock Exchange to settle at 13,607.04, amid concerns over the Rupee trading at a nine year high against the US dollar.

The broader 50-stock Nifty Index also tanked by 28.40 points to settle in negative territory at 3,984.95 from it's previous close of 4,013.35 points.

''Frontline software scrips and a select few heavyweights led the fall. Volatility was also a key feature of today's trade. However, after two successive days of rally this correction was on expected lines,'' market analysts noted.

The 30-share BSE Sensex had opened higher, at 13,733.18, and surged upto 13,755.76 during intra-day. But it was unable to sustain the level and slipped to a low of 13,581.04, due to last minute selling. The market-breadth, an indication of the overall health of the market, turned weak, as selling began for smallcap and mid-cap stocks. Against 1,459 stocks that declined on BSE, 1,112 advanced. A total of 78 scrips remained unchanged. The total turnover on BSE amounted to Rs 4547 crore. Among the 30-Sensex pack, 22 declined while the rest advanced, traders disclosed.

''Frontline IT stocks were trading with sharp losses, as selling gripped their counters on fears of a rising rupee against the dollar. The Rupee's surge is a cause of concern for IT firms, as it directly impacts their revenue and profits, a lion's share of which is accounted for by exports. IT companies use hedging tools to mitigate risks associated with currency movements,'' experts pointed out .

The Rupee continued its upward march and appreciated further to 41.85/87 against the dollar following sustained portfolio inflows amid absence of intervention from the central bank.

India's foreign exchange reserves rose above USD 200 billion for the first time in April, indicating robust foreign fund inflows, which ultimately had a negative impact on the dollar sentiment.

The BSE IT Index shed 127.38 points (2.47 per cent), to 5,022.90, and was the biggest loser among the sectoral indices on BSE, experts said. Software major Satyam Computers was the top-loser, down 4.66 per cent to Rs 457, on a volume of 12.75 lakh shares.

TCS slipped 2.15 per cent to Rs 1253, as 6.77 lakh shares changed hands in the counter on BSE. Infosys (down 2.30 per cent to Rs 2079.80) and Wipro (down 1.91 per cent to Rs 575.40) were also unable to win favour.

Maruti Udyog (down 1.92 per cent to Rs 762.40), Cipla (down 2.12 per cent to Rs 230.50), and Tata Motors (down 2.65 per cent to Rs 730.50) were the other losers.

Bajaj Auto was the top-gainer, up 2.95 per cent to Rs 2554, on a volume of 49,896 shares.

ACC was up 2.85 per cent to Rs 809, on a volume of 5.97 lakh shares, while Gujarat Ambuja Cements rose 1.47 per cent to Rs 113.90.

Cement shares were hammered in the last few months after the government took steps to rein in cement prices to fight inflation.

Most brokerages have a 'buy' on Grasim, as it is a diversified firm not relying solely on cement, unlike many others.

Index heavyweight Reliance Industries (RIL) was up 1.24 per cent to Rs 1478.10, on volumes of 10.45 lakh shares. It had surged to an all-time high of Rs 1487.80, in intra-day trade.

The Nikkei average slipped 0.77 per cent today, as investors took profits in Kyocera Corp and other recent gainers while Casio Computer Co. Ltd. tumbled after Goldman Saches downgraded the stock.

The Nikkei lost 136.38 points at 17,491.92.

US stocks had edged up yesterday, buoyed by a USD 25 billion buyout of student-lender, Sallie Mae, and following strong retail sales in March renewing optimism about economic growth. The Dow Jones industrial average shot up 108.33 points, or 0.86 per cent, to end at 12,720.46 -- within shouting distance of its record-high of 12,795.93 set on 20 Feb 2007. The S&P 500 gained 15.62 points, or 1.08 per cent, to close at 1,468.47.

The Nasdaq Composite Index advanced 26.39 points, or 1.06 per cent, to finish at 2,518.33.

Oil prices were flat in Asian trading today on lack of driving factors ahead of the expiry of the contract this week. Traders were looking ahead to the midweek US petroleum inventory report, which is likely to show rising crude stocks and falling gasoline and distillate supplies, according to a Dow Jones Newswires survey of analysts.

UNI