Sensex closes 129 pts lower on profit booking, global cues

Indian equity benchmarks and the rupee fell on Monday following negative global cues. Investors remain worried about global economic growth after sluggish US jobs data and China's inflation fell to 29-month low. Even the Ketan Parekh's stock market scam news dampened the sentiment.

The profit booking may be another reason behind today's sell-off. The BSE benchmark dropped 129.14 points to close at 17391.98 and the NSE benchmark slipped 41.80 points to 5,275.15.

It is surely profit taking, says Ambareesh Baliga, COO of Way2Wealth. "Crossing that 5,350-5,400 levels are going to be quite difficult unless we have some good dose of positive news that again I don’t think will come too soon. So people are losing a bit of patience," he explained.

He feels the next set of good news can happen only post July 31 (RBI policy day).

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The Indian rupee hit an intraday low of 56.06, but got recovered to 55.84 against the US dollar, down 44 paise at 15:31 hours IST. Excessive disappointment or hope build-up is adding to the rupee weakness, says Moses Harding of IndusInd Bank.

France's CAC, Germany's DAX and Britain's FTSE were down 0.4% each as investors are not hopeful of progress on the Eurozone debt crisis at a meeting of finance ministers later in the day in Brussels.

The euro fell to a two-year low of 1.2225 to the dollar in early Asian trade, but did recover slightly to 1.2290 a dollar.

Asian markets closed sharply lower. Shanghai tanked 2.4% as China's inflation fell to 29-month low in June to 2.2% as compared to 3% in May. Hang Seng, Nikkei, Straits Times, Kospi and Taiwan Weighted were down 0.8-1.9%.

Back home, housing finance company HDFC and engineering and construction major by sales Larsen & Toubro went down 1.2% each.

Among metals stocks, Tata Steel, Jindal Steel and Sterlite Industries tanked 1.7-2.5%. Top lenders State Bank of India, ICICI Bank and HDFC Bank slipped over 0.5%.

Two wheeler majors Hero Motocorp and Bajaj Auto, and top car maker Maruti Suzuki were down 2-2.6%.

Cigarette major ITC declined 0.5% and top telecom operator Bharti Airtel dropped 1.5%.

Country's largest software services exporter TCS outperformed, gained 1% ahead of first quarter earnings of FY13 that will be announced on July 12. However, its rival Infosys was down 0.3% as analysts expect the company to lower its forecast for the financial year 2012-13 on Thursday when it will announce its Q1 results.