Sensex recovers after sliding to its lowest since Aug 2006

October 8th, 2008 - 7:27 pm ICT by ANI  

P. Chidambaram

Mumbai, Oct.8 (ANI):The Bombay Stock Exchange’’s 30-share Sensex, which slumped by more than 8 percent to its lowest in over two years as panic gripped investors after overseas markets tanked on concerns of a looming global recession, staged a recovery in afternoon trading on Wednesday (October 8).
By 2:35 p.m. (local time), the 30-share main index was down 3.26 percent, or 380 points, at 11314.76, after hitting 10,740.76, its lowest since August 01, 2006.
The 50-share NSE index was 4.15 percent down at 3459.80.
All the index components were in the red, taking losses to 17 percent over four sessions.
In the broader market, losers overwhelmed gainers by almost 11:1 on volume of 103.8 million shares.
Traders said investors would be edgy as Indian markets are shut for a holiday on Thursday and technology bellwether Infosys Technologies announces quarterly earning the day after.
Analysts observed that the financial crisis in the US is far from ending, it has spread to the European markets and that investors are trading amidst fears of turmoil spreading to the Far East markets.
“Whatever funds, hedge funds, except for long only funds, their redemption pressure on the funds on world wide are very very severe causing or triggering this extraordinary fall apart from the fact that the financial crisis in the US has not ended , infect this has rolled over to Europe and there is a fear that it may roll over even to far east, so people have become totally risk averse toward equity and that is the real reason of the fall which we are seeing,” said Ankit Ajmera, a stock analyst.
The benchmark, among Asia’’s worst performers this year, is down 47 percent in 2008 with foreign funds selling a net of 9.9 billion dollars.
Energy group Reliance Industries, which has the heaviest weight of 14.6 percent in the index, is 4 pct down after dropping 8.7 percent to 1,529.10 rupees on foreign fund selling, traders said.
Meanwhile, amid global financial crisis, India’’s Finance Minister P. Chidambaram assured investors that the fundamentals of the Indian economy are strong.
“The markets are reacting to what is happening in the US market and in the Asian markets. In fact after the statement by the federal chairman yesterday evening and the manner in which Asian markets opened this morning, we anticipated there will be some selling pressure in the Indian market. But let me say once again for the records fundamentally there is nothing wrong with the economy and the fundamentals do not warrant any hasty and precipitate action on the part of the investors to sell,” said Chidambaram.
He added that the Indians should feel confident about the fact that economy is growing and there is no cause for any fear.
U.S. stocks plunged on Tuesday in their fifth straight declining session as fears mounted that the spiraling credit crisis would drag the economy into a deep recession.
The slide capped the biggest five-day point loss ever for the Dow Jones industrial average. It has lost more than 1,400 points over the past five sessions, nearly 13 percent of its value.
Foreign funds have sold a net of 9.9 billion dollars of shares in 2008 compared to record inflows of 17.4 billion dollars in 2007.
At 0342 GMT, Japan’’s Nikkei was down 4.9 percent, while MSCI’’s measure of other Asia Pacific stocks slipped 4.94 percent.
Nifty futures traded in Singapore dropped 4.6 percent. (ANI)

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