Sensex falls 153 points, ignoring FDI norms as rupee weakens

Mumbai: The benchmark S&P BSE Sensex on Friday surrendered initial gains from liberalised FDI norms and declined 153 points, the eighth day of losses, as the rupee weakened past the 61 level again. The 30-share Sensex opened at 19,399.55 points and climbed to a high of 19,451.70 on buying in some blue chip counters from consumer durables, IT and refinery sectors following the government's decision yesterday to relax foreign direct investment (FDI) rules in several sectors.

Dragged down by a weak rupee and FII selling, the index then declined to 19,078.72 before closing at 19,164.02, a loss of 153.17 points, or 0.79 per cent. This is the second weekly drop for the Sensex, which has fallen 1,138.11 points, or 5.61 per cent, in the past eight sessions.

The 50-share Nifty index on the NSE dropped 49.95 points, or 0.87 per cent, to 5,677.90. The SX40 index on the MCX-SX closed 0.94 per cent lower. "The fall in the markets during the week has come about despite good gains in global markets, indicating the pre-dominance of domestic concerns," said Dipen Shah, head of Private Client Group Research at Kotak Securities. "The consistent weakness in the rupee, despite RBI's and government's efforts, has impacted sentiment."

The rupee once again dropped to below the 61 mark against the dollar on demand from banks and importers. The local currency touched an all-time low of 61.21 on July 8.

To curb forex speculation, the RBI and market regulator Sebi had taken several steps, including restrictions on the futures market by way of raising margins and limiting

positions that market participants can take. RBI Governor D Subbarao on Friday reiterated that liquidity tightening measures will be rolled back only after stability

is restored in the forex market as volatility hurts growth.

Realty, power, metal, PSU, capital goods, FMCG and banking sectors declined on heavy selling pressure. Financial Technologies Ltd. was the biggest loser on the BSE for the second day, declining 21.12 per cent to Rs 151.25 after most trades were halted at unit National Spot Exchange Ltd.