Indian markets hammered in FII sell-off

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 to 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.

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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.

Globally, Nikkei dropped 1.4% to 14,109, Singapore Straits Times rose 0.3% to 3,160, China’s Shanghai Composite index was down 2.5% at 1,958 while Hong Kong’s Hang Seng shed 1.3% to 20,582 today.

European markets traded firm. France’s CAC gained 1.1% to 3,795, Germany’s DAX gained 1.3% to 7,908 while UK’S FTSE rose 1% to 6,440.

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Back home, 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%, Sun Pharma gained 0.7%, Infosys added 0.8%, BHEL was up 2.3% on the BSE.

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

The key notable movers included counters such as Tata Motors which dropped 2.7% 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% 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.

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ITC is trading higher by 1.4% at Rs 347, extending its 5.3% 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%.

Alembic Pharmaceutical has rallied 12% 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.