Sensex sinks over ‘coal scam’ report
Leaked report fuels worries about stability
The markets plunged on Thursday to register their biggest fall in more than three weeks on panic selling as Parliament was rocked following reports of an alleged coal scam to the tune of `10.67 lakh crore. The rupee, which breached the 51 level against the US greenback to hit a twomonth low coupled with a bout of disappointing manufacturing data from China, France and Germany further dampened investor sentiments.
The Sensex tanked 405.24 points or 2.30 per cent to end the trading session at 17,196.47 points while the Nifty closed at 5,228.45 points plunging 136.50 points or 2.54 per cent. Meanwhile, the rupee weakened to close at 51.22 against the dollar due to demand for the latter from banks and importers.
“The leaked CAG report gave an impression that it could potentially destabilise the government resulting in lower confidence on the local currency. Further, the rise in the global crude prices on the
The leaked CAG report gave an impression that it could potentially destabilise the Centre resulting in lower confidence on the rupee
issue of supply of oil from Iran also resulted in increased demand for dollar from importers,” said Mr Pramit Brahmbhatt, chief executive officer, Alpari Forex.
“There was nervousness in the market in the morning itself due to the leaked CAG report following which investor participation was very low. Europe which opened lower on weak economic data further intensified the selling pressure,” said Mr Deven Choksey, managing director, K.R. Choksey Shares and Stock Brokers.
About 28 out of the 30 Sensex constituents ended deep in the red. India’s Volatility Index jumped 17.95 per cent to 24.77. Surpr-isingly, provisional figures suggest that FIIS have remained net buyers to the tune of `246.96 crore.
“We saw a panic selling today on the back of uncertainty over the CAG report. The new CAG report could be the next Pandora’s box. As per the report, undue benefit could be received by power, steel and cement companies which use coal as their fuel and these sectors saw heavy offloading on Thursday. Unless clarity emerges, these sectors may see more downside in coming days,” commented Mr Alex Mathew, head technical and derivatives research, Geojit BNP Paribas Financial Services adding that if the Nifty moves below 5200 then it can fall towards 5,186 and 5,162 levels.
The shares of gold loan firms Manappuram Finance and Muthoot Finance slumped 12.36 per cent and 13.03 per cent after the Reserve Bank of India (RBI) tightened the norms for granting loan against gold by Non Banking Finance Companies (NBFCS).