Markets fall sharply but begin recovery mid-afternoon (Second Lead)

September 22nd, 2008 - 4:40 pm ICT by IANS  

Mumbai, Sep 22 (IANS) Indian equities markets opened strong Monday, slipped into the red within 20 minutes into trading and fell further before beginning to recover mid-afternoon and should close flat or slightly higher, analysts said.The 30-share benchmark sensitive index (Sensex) of the Bombay Stock Exchange (BSE) opened about 180 points higher and then dipped by nearly 342 points by mid-afternoon before coming back to the recovery path.

At around 2.15 p.m., the Sensex had recovered almost completely and was at 14,023.25, just 19.07 points or 0.14 percent down from its previous close last Friday.

The broader based 50-share S&P Nifty index of the National Stock Exchange (NSE) showed a similar trend. It opened strong to shoot up by nearly 50 points against its previous close at 4,245.25 last Friday.

It then fell by nearly 95 points by mid-afternoon before starting to recover and at around 2.15 p.m. was ruling at 4,231.00, just 14.25 points or 0.34 percent down.

“There is little clarity on news such as Goldman Sachs and Morgan Stanley announcing conversion into commercial banks, and US government announcing a $700 billion fund to buy illiquid assets,” said Jagannadham Thunuguntla, head of capital markets in India’s fourth largest share brokerage firm SMC Group.

“The market is directionless and traders are taking a breather with no clear strong buying or selling trends,” confirmed portfolio strategist and US-trained chartered financial analyst Manoj Krishnan of Delhi-based Price Investment Management and Research Services.

“Traders are trying to evaluate the implications of the end of the US investment banking era which has completely changed the landscape of Wall Street,” said Thunuguntla.

“Now that the markets have begun to recover we have already touched the day’s low and the Sensex should close flat or with a small gain of about 50-100 points,” Krishnan said.

At around 2.15 p.m. the BSE mid cap index was ruling at 5,232.39, up 3.61 points or 0.07 percent.

The BSE small cap index at 6,210.05 was down 5.94 points or 0.10 percent.

The recovery trend shows that the last hour of trading will show a buying trend although it may not be very strong, analysts said.

“That the markets are recovering after the opening of the European markets is a good trend and we should finish in the green,” Krishnan said.

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