Selling pressure gathered momentum after gold plunged to a 33-month low in overseas markets as weak US economic data strengthening the case for reduced stimulus from the Federal Reserve as the dollar climbed
Gold prices on Wednesday declined to a one-month low by losing Rs620 to Rs26,680 per 10 gram on hectic selling by stockists, triggered by a steep fall in the precious metal’s prices overseas.
The current fall in the yellow metal prices placed it to a level last seen on 28th May.
Silver followed suit and plunged by Rs1,000 to Rs40,500 per kg on poor offtake by industrial units and coin makers.
Traders said selling pressure gathered momentum after gold plunged to a 33-month low in overseas markets as weak US economic data strengthening the case for reduced stimulus from the Federal Reserve as the dollar climbed. Silver sank to its lowest level since August, 2010.
Gold in Singapore, which normally sets the price trend on the domestic front, dropped by 2.6% to $1,244 an ounce, the lowest level since 13 September 2010 and silver retreated 4.5% to $18.76 an ounce.
On the domestic front, gold of 99.9% and 99.5% purity suffered a setback of Rs620 each to Rs26,680 and Rs26,480 per 10 grams, respectively, a level last seen on 28th May.
Sovereigns followed suit and lost Rs200 to Rs24,000 per piece of eight grams.
In a similar way, silver ready nosedived by Rs1,000 to Rs40,500 per kg and weekly-based delivery by Rs1,025 to Rs39,590 per kg. Silver coins plunged by Rs2,000 to Rs76,000 for buying and Rs77,000 for selling of 100 pieces.
The rupee plunged by 69 paise to 60.35 a dollar at 1535 hrs on the Inter-Bank Foreign Exchange market today due to increased buying by banks and oil importers
The rupee on Wednesday plunged to an all-time low of 60.35 against the dollar in mid-session trade, dragged down by heavy month-end demand for the US currency.
After a lower start, the rupee plunged by 69 paise to 60.35 a dollar at 1535 hrs on the Inter-Bank Foreign Exchange market today due to increased buying by banks and oil importers, forex dealers said.
Persistent foreign capital outflows from weak local equities also affected the rupee value against the dollar, they said.
The Indian currency also remained under pressure following reports of the dollar continuing its upward march against other leading currencies for the sixth straight day.
The downward trend was fuelled further by data underscoring the US Federal Reserve's view of an improving economy and a likely slowdown in monetary stimulus.
Treasury managers are expecting the RBI to intervene to stem rupee's fall.
A close above 5,605 on the Nifty will be the first sign of a reversal of the downturn. A close above 5,675 will be a strong confirmation of the upmove
The range-bound market gave up all its gains in the post-noon session after the rupee touched a new all-time low of 60.35 against the dollar in intraday trade. A close above 5,605 on the Nifty will be the first sign of a reversal of the downturn. A close above 5,675 will be a strong confirmation of the upmove. The National Stock Exchange (NSE) registered a volume of 57.13 crore shares and advance-decline ratio of 498:894.
The Indian market opened in the positive following the market regulator Securities and Exchange Board of India’s (SEBI) fresh steps to relax rules for foreign investors. The announcement was made after the market closed on Tuesday. Support from its Asian peers which were mostly higher in morning trade after the Chinese central bank assured investors that it was committed to boosting growth and would infuse funds in the banking system, if necessary, also spurred investor sentiment.
The Nifty opened 19 points higher at 5,628 and the Sensex started the day at 18,662, a gain of 33 points over its previous close. Gains in oil & gas and IT stocks led the benchmarks to their highs in the first hour of trade. The Nifty rose to 5,635 and the Sensex inched up to 18,691 at their respective highs.
However, the benchmarks were range-bound fluctuating between the red and green in morning trade, a day ahead of the expiry of the F&O derivatives contract.
The market continued to see choppy trade and witnessed sideways movement in the noon session. However, reports of the rupee breaching the 60-mark against the dollar and touching a new all-time low of 60.35 in today, led the market into the red post-noon trade.
The decline led the market to its lows towards the end of the trading session. At the lows, the Nifty fell to 5,579 and the Sensex declined to 18,514.
The market finally settled near the lows of the day with the Nifty losing 20 points (0.36%) to 5,589 and the Sensex falling 77 points (0.41%) to settle at 18,552.
Among the broader indices, the BSE Mid-cap index declined 0.67% and the BSE Small-cap index fell 0.37%.
The gainers in the sectoral segment were BSE IT (up 1.69%); BSE Power (up 0.93%); BSE Fast Moving Consumer Goods (up 0.66%) and BSE TECk (up 0.40%). The main losers were BSE Auto (down 1.79%); BSE Metal (down 1.31%); BSE Consumer Durables, BSE Healthcare (down 1.12% each) and BSE Bankex (down 1.03%).
Out of the 30 stocks on the Sensex, 11 stocks settled higher. The gainers were Hero MotoCorp (up 3.45%); GAIL India (up .36%); TCS (up 2.84%); NTPC (up 2.13%) and Wipro (up .97%). The major losers were Bharti Airtel (down 5.74%); Mahindra & Mahindra (down 4.63%); Tata Motors (down 3.02%); Jindal Steel & Power (down 2.89%) and Hindalco Industries (down 2.32%).
The top two A Group gainers on the BSE were—Muthoot Finance (up 8.26%) and GlaxoSmithKline Consumer Healthcare (up 7.28%).
The top two A Group losers on the BSE were—Gitanjali Gems (down 9.99%) and Glenmark Pharmaceuticals (down 6.13%).
The top two B Group gainers on the BSE were—Cable Corporation of India (up 20%) and Caprihans India (up 20%).
The top two B Group losers on the BSE were—Indsil Hydro Power & Manganese (down 19.50%) and IOL Chemicals & Pharmaceuticals (down 16.67%).
Of the 50 stocks on the Nifty, 19 ended in the in the green. The major gainers were TCS (up 3.86%); Hero MotoCorp (up 3.84%); Asian Paints (up 3.82%); Power Grid Corporation (up 2.81%) and HCL Technologies (up 2.69%). The key losers were Bharti Airtel (down 5.91%); M&M (down 5.10%); Kotak Mahindra Bank (down 4.50%); IndusInd Bank (down 4.17%) and Ranbaxy Laboratories (down 3.66%).
Markets in Asia, with the exception of the Chinese and Japanese benchmarks, closed higher today after the People’s Bank of China asserted that it would take steps to ease liquidity crunch faced by the nation’s banks. The Nikkei 225 settled lower against the dollar.
The Hang Seng surged 2.43%; the Jakarta Composite surged 3.82%; the KLSE Composite gained 0.70%; the Straits Times advanced 0.47%; the Seoul Composite rose 0.16% and the Taiwan Weighted settled 1.59% higher. Among the losers, the Shanghai Composite fell 0.41% and the Nikkei 225 dropped 1.04%.
At the time of writing, key European markets were up between 1.08% and 1.84% on positive economic indicators from the US and Germany. At the same time, the US stock futures were trading in the green.
Back home, foreign institutional investors were net sellers of equities amounting to Rs1,285.86 crore on Tuesday. On the other hand, domestic institutional investors were net buyers of shares totalling Rs824.36 crore.
Hyderabad-based pharmaceutical major Dr Reddy’s Laboratories has launched Lamotrigine Extended-Release (XR) tablets in the US market on 25th June. The move comes after the United States food and Drug Administration's approval to its abbreviated new drug application (ANDA). Lamotrigine XR is a therapeutic equivalent generic version of Lamictal XR (lamotrigine), which is indicated for the treatment of epilepsy. The stock fell 0.65% to close at Rs2,086.10 on the NSE.
Power equipment major Crompton Greaves today said it has bagged three orders worth over Rs231 crore from Power Grid Corporation of India. The contracts are for supplying equipment to state-run Power Grid for its Thiruvelum, Kurnool, Raipur and Wardha sub-stations. Crompton Greaves declined 3.49% to Rs78.70 on the NSE.
The United Nations-backed Medicines Patent Pool, Shilpa Medicare and Gilead Sciences have entered into an agreement to increase the access to medicines for HIV/AIDS treatment. The agreement covers tenofovir, emtricitabine, cobicistat, elvitegravir and a combination of the four known as “the Quad”, Medicines Patent Pool said. Shilpa Medicare gained 1.07% to close at RS255 on the NSE.