Reuters
Indian shares edged lower after earlier hitting their lowest levels in 1-1/2 months as software services providers fell after Tata Consultancy Services’ tepid comments on its outlook, while other blue-chips were hit by global risk aversion.
Oil prices touched fresh 5-1/2-year lows yesterday, spurring an emerging market selloff as demand for the safe-haven yen picked up while European stocks stabilised after their worst week since 2011.
Foreign investors sold shares worth Rs8.65bn on Friday, bringing their total outflow to nearly $280mn over the last four consecutive sessions of sales, regulatory data showed.
The 50-shares NSE index has started looking oversold after falling for six out of the past seven sessions and closing below its 50-day moving average on Monday for the first time in nearly two months.
“We believe the downside is limited from the current levels in index and expect consolidation or technical rebound in the coming session prior to any further fall,” said Jayant Manglik, president at Religare Securities.
The benchmark BSE index ended 0.11% lower at 27,319.56.
The broader NSE index closed down 0.05% at 8,219.60, closing below its 50-day moving average for the first time since October 21.
Both indexes earlier declined to their lowest intraday level since October 30.
Software stocks led the decliners after sector leader TCS on Friday said seasonal trends would impact its Q3 revenue. TCS fell 3.8%, Tech Mahindra ended down 3.6%, Wipro lost 0.3%, Infosys ended 0.7% lower and HCL Technologies closed 1.8% down.
Metals and mining stocks fell tracking lower Chinese rebar futures and spot iron ore prices.
Tata Steel fell 0.4%, Jindal Steel and Power lost 2%, JSW Steel ended down 1.4% while Sesa Sterlite fell 2.8%.
In other blue-chips, Bharat Petroleum Corp fell 4.7% and Axis Bank lost 1.4%.
Meanwhile the rupee posted its biggest single-day fall in more than four months, tracking steep losses in emerging market currencies while domestic data showing an unexpected contraction in industrial output sparked concerns about economic growth.
The falls pushed the rupee to a new 10-1/2 month low against the dollar on Monday, in a session when the Indonesian rupiah hit a 16-year low amidst a slump in crude prices and worries about US rate hikes expected next year.
The central bank was seen as having stepped in to prevent more losses in the rupee.
“Today, RBI sold dollars at 62.70 to contain rupee’s rapid fall but the dollar demand was huge,” said Param Sarma, chief executive officer at NSP Forex, a consultancy and brokerage firm.
“While one can expect the central bank to intervene regularly to halt the rupee’s fall, rupee could possibly weaken to 63.30 or thereabouts by end-December before any recovery is seen,” he added. The partially convertible rupee closed weaker at 62.94/95 per dollar, after hitting 62.95, its lowest level since January 28 compared with Friday’s 62.29/30 close.