Amid mayhem, India’s Sensex dips below 10,000 level (Roundup)October 17th, 2008 - 7:28 pm ICT by IANS
Mumbai, Oct 17 (IANS) Despite a strong opening, Indian equities crashed for the third day in succession Friday, dragging a key index to the four-digit mark for the first time in two years, as sentiments were battered by renewed fears of US recession and overall global slowdown.Amid the global mayhem, the sensitive index (Sensex) of the Bombay Stock Exchange (BSE), was languishing at 9,975.35 points at the closing bell, with a loss of 606.14 points, or 5.73 percent, over the previous close.
Each of the 13 sector-specific indices were in the red, as was the case with the 30 shares that make up the Sensex - which has shed nearly 25 percent over the past month and over 45 percent during the past year.
The index fell to the present level from a peak of 21,206.77 points in a matter of nine months. This was also the lowest level for the 30-share index since July 24, 2006.
Finance Minister P. Chidambaram, who was at a seminar on the disabled organised by the Federation of Indian Chambers of Commerce and Industry (Ficci), chose to remain silent Friday.
“I know what you guys want to ask me. But I am not going to say anything,” he told reporters here.
The key index had opened on a positive note after two successive days of losses, but was ruling flat post-noon amid some volatile trading, as sentiments remained nervous over possible recession in the US.
Then onward there was a steady and steep decline, during which the index touched the day’s low of 9,911.32 points.
“People are scared,” said Bijay Murmuria, director with Sumedha Fiscal Services and President of the Association of National Exchanges Members of India.
“No one is willing to invest and this fear factor is having a chain effect on everybody,” Murmuria told IANS in Kolkata.
Reliance Infrastructure led the losers, down 11.96 percent, followed by Jaiprakash Associates, down 10.70 percent, DLF Ltd, down 10.34 percent, NTPC, down 9.68 percent, and Reliance Communications, down 9.64 percent.
Among the sector-specific indices, that for realty was down 10.25 percent, followed by 8.09 percent for power, 6.12 percent for metals, 5.91 percent for technology and 5.52 percent for consumer goods.
The shadow of US recession and the global economic slowdown weighed so heavily on the mood that investors chose to ignore the steps by the Indian government and the central bank to infuse more liquidity into the system.
“This is pure overselling by foreign funds. Until there is some control on their selling, there is no breather for Indian markets,” said S.P. Tulsian, Mumbai-based investment adviser.
“There is a lack of interest from foreign institutional investors as well as retail investors due to the financial meltdown,” said Ashok Jainani, head of research with Khandelwal Securities.
“Everybody is holding back on investing, as most of them feel the market will crash further.”
Foreign funds, which have been the main drivers of India’s stock market upswing in recent years, were net sellers of equity in Indian bourses on each of the four days of trading this week, pulling out over a billion dollars.
These foreign institutional investors have been net sellers of equity worth $2.46 billion in October and $11.56 billion during the calendar year, latest data with the markets watchdog showed.