The Hindu Business Line : War fears weigh on rupee, stocks

THE rupee fell to an all-time low against the dollar even as the equity markets continued to remain in the grip of war fears for the eighth consecutive day on Thursday. Sellers outnumbered buyers driving the BSE Sensex further down by 61 points in today's trading.

The currency closed at a new low of 49.0550/0650 against the dollar on apprehensions of war. The mood in the stock market continued to remain depressed in the absence of a clear indication regarding skirmishes on the border between India and Pakistan.

Dealers at top broking firms said that until some clear indications were available, there would not be any fresh buying.

In the last eight trading sessions, Sensex has gone down by 329 points (9.5 per cent) and NSE's S&P CNX Nifty 93 points (8.29 per cent).

Today, the Sensex opened higher at 3,193.64, but selling in most of the index counters pulled it today's low of 3,106.64. It ended at 3,114.05, down 61.44 points (1.93 per cent). On NSE, S&P CNX Nifty closed at 1,026.75, down 18.55 points (1.77 per cent).

However, the bond market witnessed a recovery with the benchmark ten-year yield at around 7.80 per cent as compared to the previous 8.20 per cent.

Precious metals, which had flared up in the past few sessions, edged down on buyers' resistance on indication of a marginal dip in global prices. Gold (24 carat) ended at Rs 5,270 per 10 gm as compared to the previous Rs 5,290.

In spite of depressed sentiment in the stock market trading, there was select buying in some of the top rung IT companies by FIIs. But the buying was very low.

"Valuations in the stock market are turning attractive with every fall, but in case there is war between India and Pakistan there would be a sharp slide,'' said a dealer at a top broking firm.

Major losers included ITC, down by 5.62 per cent at Rs 583.55. The decline was mainly because the company's results failed to enthuse the market. A number of broking firms have recommended sell in the ITC stock following the announcement of the financial results for 2001-02. Other in the losers' category were Bajaj Auto (down 4.46 per cent), ICICI (down 9.61), Digital Globalsoft (down 5.23 per cent). Gainers included Trent (up 7.12 per cent), Silverline Technologies (up 6.62 per cent).

On BSE, 722 shares declined and 571 advanced, indicating more sellers.

Dealers said the 3,100 level for the Sensex would be a crucial factor for Friday's session. In the event this level were broken, a possibility of a further decline in stock values could not be ruled out, they said.

The forex market is expected to remain range-bound on Friday.

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