Weak rupee deficit weigh on Sensex

Indian stocks fell yesterday, tracking regional peers, as a weaker rupee fanned concerns the government will struggle to contain its fiscal deficit and cool inflation, and as political tension in Greece heightened the region\'s crisis. Reliance Industries Ltd. (RIL), owner of the world\'s largest refining complex, declined to its lowest since December. DLF Ltd., the largest developer, slid for the first time this week. ITC Ltd, the biggest cigarette company, surged the most in 14 months after Citigroup Inc. raised its price estimate on the stock. The BSE India Sensitive Index, or Sensex, lost 0.4 per cent to 16,479.58. The S&P CNX Nifty Index lost 0.4 per cent. \"Indian markets are slowing going to start pricing in a possible contagion scenario in Europe, which could potentially take the Nifty lower to 4,600 and the rupee to Rs56-Rs57 a dollar,\" Gaurav Doshi, a portfolio manager at Morgan Stanley India Financial Services in Mumbai, told Bloomberg UTV. \"The market is aware that the Reserve Bank of India\'s ability to intervene is very limited.\" The rupee weakened for the second day, boosting the cost of oil in a nation that imports about 80 per cent of its crude, stoking inflation and limiting the central bank\'s scope to cut rates. Meanwhile, global investors bought a net Rs1.6 billion (Dh109 million) of Indian equity derivatives yesterday, according to the National Stock Exchange. Foreign funds sold a net Rs3.99 billion of shares in the cash segment yesterday, according to preliminary data given by the bourse.