Sensex tumbles 405 points

Mumbai: The BSE Sensex plunged to 2-week low of 17,196.47 today, down 405 points as investors sold stocks amid weakening rupee, official auditor CAG`s report that government caused huge losses to the exchequer in allocating coal blocks and shaky overseas markets. Of the 30 Sensex scrips, 28 tumbled. All the 13 sectoral indices closed in losses, with realty, power, banking, capital goods, metal and refinery stocks being hit hard.

Market heavyweight Reliance Industries dropped 4.15 per cent, and Infosys by 1.39 per cent. The two carry 20 per cent weight on the Sensex. The rupee`s sharp decline against the US dollar to Rs 51 level worried investors that it will inflate government`s import bill, especially on account of oil, worsening fiscal deficit situation. Besides, reminiscent of the 2G spectrum allocation scam, the Comptroller an Auditor General (CAG) said in a draft report that the government lost Rs 10.67 lakh crore on account of allotment of coal blocks to 100 private and public sector companies without auction during 2004-2009.

However, CAG later informed the Prime Minister that media reports on alleged coal scam were "exceedingly misleading". Sensex moved in a narrow range till late afternoon, but last hour selling pulled it down sharply to 17,196.47, erasing 405.24 points or 2.30 per cent. In last two days, it had risen 328.34 points or 1.90 per cent. Similarly, NSE 50-scrip index Nifty tumbled 136.50 points or 2.54 per cent to two-week low of 5,228.45.

"A mix of domestic and global factors hurt investor sentiment. The leakage of a draft CAG draft report weighed markets down. The Indian rupee weakened against the US dollar further spooked sentiments," said Paras Bothra, Research Head, Ashika Stock Brokers. Globally, European markets were trading weak, adding to investor woes, he said.