US downgrade continues to plague Indian markets (Roundup)

August 8th, 2011 - 6:09 pm ICT by IANS  

Pranab Mukherjee Mumbai, Aug 8 (IANS) A benchmark for the Indian equities markets Monday closed 315 points lower and below the 17,000-mark as bourses remained jittery over the US sovereign debt rating downgrade.

The 30-scrip sensitive index of the Bombay Stock Exchange (BSE), which opened at 16,907.57 points, closed at 16,990.18 points, down 315.69 points or 1.82 percent, compared to its previous close at 17,305.87 points.

It had fallen to an intra-day low of 16,759.45 points, but later recouped some of its losses.

The Nifty of the National Stock Exchange (NSE), too followed a similar pattern and closed at 5,118.5 points, down 92.75 points or 1.78 percent.

“To begin with, the cues were negative for the market. The Hong Kong market was down 3.6 percent when the Indian markets opened. However, the markets recovered smartly and at one point of time had almost erased the losses,” said Sanjeev Zarbade, vice president, private client group research, Kotak Securities.

But the recovery faltered soon and another round of sell-off started. “This time, the selling pressure in European market was the trigger,” Zarbade added.

Broader markets too closed in the red. The BSE midcap index closed 1.52 percent lower and the BSE smallcap index fell 2.23 percent.

The market breadth at the BSE was expectedly negative, with 661 stocks advancing, 2,199 scrips on the decline and 82 remaining unchanged.

All 13 sectoral indices on the BSE ended in the red. Realty, IT, telecom and metals were among the largest losers in Monday’s trade.

The government tried to assure domestic and global investors that India would continue to grow as its fundamentals were strong and it still relied to a large extent on domestic demand.

“As India’s growth story is strong we could see foreign institutional investors seeing India as an attractive investment destination even if there is any temporary outflow,” said Finance Minister Pranab Mukherjee.

Other Asian markets too closed in the red, losing heavily for the second consecutive trading session.

Japanese Nikkei closed 2.18 percent down at 9,097.56 points, the Chinese Shanghai Composite shed 3.79 percent to end at 2,526.82 points, while Hong Kong’s Hang Seng fell 2.17 percent to close at 20,490.57 points.

European markets too were trading weak.

UK’s FTSE 100 was trading 1.64 percent lower at 5,160.97 points, while the German DAX was down 2.32 percent at 6,091.28 points.

The French CAC 40 was ruling 1.75 percent lower at 3,221.21 points.

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