The Hindu Business Line : Sensex falls 151 on FII outflow fears — Bearish sentiment across global equity markets

STOCK prices continued their downward trend on Wednesday with the benchmark BSE Sensex closing below the 8,000-mark, amid fears that a sliding rupee and weak international markets could lead to higher FII outflows.

The rupee touched a low of 45.40 against the US dollar intra-day and led to heavy selling by foreign investors. However, the rupee recovered later in the day and closed at 45.16.

Concern over the US interest rates has further aggravated the bearish sentiment across the global equity market.

"Market sentiment is down due to FII selling and weak rupee. Some FIIs have started year-end selling to book profit, which they normally do in November. This has kept the potential investors away," said Mr C.J. George, Managing Director, Geojit Financial Services.

The stock prices opened lower in the morning as most Asian markets had fallen sharply. The BSE Sensex ended the day at 7971.06, down 151.19 points (1.86 per cent) and the NSE's S&P CNX Nifty was down 56 points (2.26 per cent).

With today's fall, the Sensex was down by 850 points from its peak of 8,821 touched on October 5. "Weak international equity markets led to the fall in local prices. The situation was aggravated by margin calls being triggered at lower levels," said Mr Ambarish Baliga, Vice-President, Karvy Stock Broking. Among the major international markets that fell were Japan's Nikkei Index, down 1.67 per cent, and Hong Kong's Hang Seng 1.5 per cent. The Singapore Straight Times index was down 2.9 per cent and South Korea's KOSPI Index fell 2.8 per cent. Even European markets were weak in early trades.

Brokers said the overall sentiment is bearish due to heavy selling by FIIs in the last few days. They said most of the selling came from hedge funds who were concerned over the rise of dollar against the rupee. FIIs were net sellers in the equity market this month and till Tuesday, they were net sellers to the tune of Rs 1,230.50 crore.

The results announced by some companies today were also not encouraging. Brokers said the financial results of Gujarat Ambuja and Wipro failed to meet expectations.

The Gujarat Ambuja stock fell 0.53 per cent to close at Rs 65.95 on the BSE and Wipro was down 1.23 per cent at Rs 368.70. Among the Sensex companies, just three stocks - ICICI Bank, ACC and Satyam Computer - advanced.

Mr Baliga said the sentiment is likely to remain depressed for some more time.

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Sensex falls 151 on FII outflow fears — Bearish sentiment across global equity markets