Yesterday SENSEX closed at 13124.32 and nifty at 3819.95, after a sharp correction of 161.61 points in SENSEX.

Over all market remained pretty ranged for the major part of the day. During the closing half SENSEX attained a day low of 13100 while unexpectedly Nifty50 spiked a low of 3768 and hovered around 3790 for a few seconds.

The confusing part is that, while NSE database is showing 3768 as day low, intra-day chart on Exchange website, nowhere indicating price below 3800.

Sectors, declined severely, are bank, IT and auto. Banking companies suffered most, due to increased cost of overnight money in call money market. Yesterday call rate hover around 10% to 15% annualized.

Declining dollar created a concern for IT companies. Despite their declared use of hedging tool to counter currency fluctuation, analysts remained cautious a bit over possible effect of currency volatility on those companies’ March quarter bottom line.

Following last week’s spectacular turn around, auto counters gained to some extent, but rising cost car-loan and inflationary pressure knocked them down on Monday, too.

On the money market front, overnight borrowing rate remained steady throughout Monday and ended at 15%. Central Bank injected Rs. 36,700/- through repo operation to adjust the liquidity while reverse-repo operation remained limited to few crore.

Rupee gained some more strength following high overnight borrowing rate and purchase of rupee by exporters. Though, latter it was found that oil companies started buying dollar at lower levels to meet their year-end import bills.

The whole currency market situation has made RBI’s job quite difficult - to support rupee and export earnings, if they carry on buying dollar that will inject more rupee to the system and more rupee in domestic market means worsening domestic inflationary atmosphere.