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Rupee fall leads to panic selling
Tue, 11 Jun Closing

Indian equity markets plunged 1.5% on Tuesday on heavy selling by funds and retail investors in consumer durables, metal and realty stocks amid weak Asian cues. Market participants resorted to heavy selling after rupee fell to a new low of 58.88 on dollar outflows and persistent demand for dollar from banks and importers. While the BSE-Sensex closed lower by 298 points, the NSE-Nifty closed lower by 89 points. Both the BSE Mid Cap and the BSE Small Cap closed on a negative note.

As regards global markets, Asian indices closed in the red. European indices have also opened in the red. The rupee was trading at Rs 58.45 to the dollar at the time of writing.

According to a leading financial daily, Aditya Birla Group, Coal India Ltd and China's state-owned Shenhua Group Corp Ltd are among companies considering bids for some of Rio Tinto Ltd's Australian coal assets, valued at an estimated US $3.2 bn. Rio Tinto is selling a 29% stake in its Coal & Allied business and its majority stake in the Clermont mine in Queensland state, with preliminary bids due this week. Rio Tinto, is offloading a string of assets to help cut its US $26 bn in debt and protect its single-A credit rating. It is also looking to cut its exposure to the coal industry, which has been squeezed by surging costs and a 30% slump in prices since early 2012. India's huge appetite for coal is driving the bids by Indian firms. While the country boasts the world's fifth-largest reserves of coal, it still suffers power cuts due to supply bottlenecks and the poor quality of coal delivered to power plants.

According to a leading financial daily, Bharti Airtel lost its share of the revenue market to Idea Cellular and Vodafone. According to the data released by the telecom regulator, the Telecom Regulatory Authority of India (Trai), the industry revenue grew at a sluggish pace of 2.9% to Rs 388 bn at the end of March, an increase of 10.8 bn from the quarter ending December when it had recorded Rs 377 bn in aggregate revenue. Buoyed by an 8.5% growth in the voice traffic over its network, Idea Cellular gained 90 basis points to earn 15.7% of the total revenue generated in the mobile telephony market during the quarter. It was followed by Vodafone that gained 50 basis points contributing 22.9% of the total revenue. Bharti Airtel, after a blip in the second quarter, continued to see erosion in its revenue market share which slid another 40 basis points during the January-March period.

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