Sensex closes at 20,229 pts, lowest in 11 weeks

PTI  Mumbai, November 21, 2013

The benchmark Sensex on Thursday fell 406 points, the biggest drop in 11 weeks, as most European and Asian stocks declined on fresh concerns the US Federal Reserve will ease its stimulus programme as the economy improves.

All 30 stocks on the S&P BSE Sensex ended with losses, with ITC, HDFC, Reliance Industries and Infosys accounting for 171 points of the decline. Sesa

Sterlite, Larsen & Toubro, BHEL and NTPC were the biggest losers on the Sensex.

All 13 sectoral indices on the BSE fell, led by bank, capital goods and realty shares.

The Sensex opened lower and declined steadily to close at 20,229.05, a drop of 406.08 points or 1.97%. It was the biggest fall for the index since September 3, when the measure lost 652 points or 3.45%.

The CNX Nifty index on the National Stock Exchange closed at 5,999.05, losing 123.85 points or 2.02%. The SX40 on the MCX Stock Exchange fell 237.62 points to 12,008.28.

"The Fed is looking to taper down its $85 billion in monthly bond buying due to new economic data that suggests that the employment situation in the US is improving," said Raghu Kumar, Co-founder of RKSV.

"If the economy continues to improve as per expectations, then we can expect the Fed to slowly begin tapering its quantitative easing."
Fed officials expected "data would prove consistent with the committee's outlook for ongoing improvement in labor market conditions and would thus warrant trimming the pace of purchases in coming months," according to the minutes of the Federal Open Market Committee meeting on October 29-30.

Overseas investment in stocks declined to net Rs. 80.4 crore yesterday from Rs. 1,014.61 crore a day earlier, according to provisional stock exchange data.

The rupee dropped for the second straight day against the dollar and traded at 62.97.

Stocks in Asia, barring Japan, declined on tapering concerns and after an index of Chinese manufacturing fell.

The Hang Seng Index, the Shanghai Composite Index, Korea's KOSPI and the Straits Times Index in Singapore closed lower. In Europe, Germany's DAX and France's CAC 40 were down, while the FTSE 100 was up.

ABHISHEK KUMAR
PGDM 1ST YR