Stocks, rupee fall further on economy concerns

Thursday, 21 February 2013 00:53 - - {{hitsCtrl.values.hits}}

Reuters: Stocks and the rupee fell further on Wednesday, both hitting a seven-week low, on concerns over the health of the economy after the International Monetary Fund warned of slower growth.

The main share index fell 0.12 per cent, or 6.94 points, to end at 5,730.54, its lowest since 3 January.

The IMF said last week the economy faced high inflation and lower tax revenue risks, prompting speculation the Government may turn to expensive commercial borrowing to bridge the budget gap, which would drive interest rate higher.

“Foreign selling and interest rates are worrying them,” said a stockbroker.

The day’s turnover was Rs. 763.5 million ($ 6.02 million), less than this year’s daily average of Rs. 1.11 billion.

Foreign investors were net sellers of Rs. 223.97 million worth of shares on Wednesday, extending the net foreign outflow so far this year to Rs. 838.56 million.

The rupee ended weaker at 127.35/45 to the dollar, its lowest since 3 January, from Tuesday’s close of 127.20/30, dealers said.

Yields in T-bills were steady at a weekly auction on Wednesday at their near one-year low, after falling in the past 10 straight sessions.