Mumbai, Aug 16 (): Stock exchanges plummeted by 500 points after posting a plus in the previous four-day trading.
Rupee which rose in the morning trade slipped to a record low of 62 for a dollar. Morning trade was positive after the RBI put forth measures like banning import of coins and medallions and increasing duties. It also put a curb on investments made abroad by Indians. This was expected to strengthen the rupee.
Yesterday due to Independence Day there was no trading. On Wednesday the rupee closed at 61.44. In the morning at 10 a.m. the partially convertible rupee went down by 0.9 % and was trading at 62.00 per dollar. The Nifty slipped below 5600. The fall in the morning was 164 points, a drop of 2.86%.
The Bombay Sensex in the morning dropped by 2.5% to 497 points. Those indexes that slipped are Consumer durable index (8%), Banking (3.6%) Realty(3.9%) and Power(3.2%).
Major losers are Maruti Zukuki, NTPC, HDFC, BHEL and Tata Power. Wipro and Hero MotoCorp gained. The Japan Nikki and HongKong HangSeng too was trading lower as US markets started to sell off on US jobs data showing increases in employment and consumer durable prices increasing. This signalled the early end of US Fed stimulus of bond buying. China, Shanghai and South Korea Kospi were trading higher in Asian markets.
Experts have predicted that the bear market of 2008 is repeating itself and it is here to stay. The macroeconomic environment is not going to see a rally in the near future and achieving a 5% GDP seems to be difficult. They are advising investors to go for stocks of export- oriented sectors to take advantage of the falling rupee. They are advising traders to avoid banks as they look like going on a decline.
The best bet in present times is to go for IT and pharma stocks. These sectors would get increased revenue for their clients are mostly in the US and Europe. France and Germany have come out of the euro recession.