Stock market indices fell to six-week lows on fears that the global banking crisis could widen, driving economies into deeper recession.
The fall was led by the metal, power and banking sectors. Only the fast moving consumer goods (FMCG) sector was in the positive, with Hindustan Unilever up by over 3 per cent. Wipro, India’s third-largest provider of software services, fell to the lowest in two months after third-quarter profit growth slowed and lagged behind analysts’ estimates.
The Bombay Stock Exchange Sensitive Index, or Sensex, fell by 321.38 points to close at 8,779.17. The Nifty closed at 2706.15, down 90.45 points. Even the Asian markets closed weak today with Hang Seng and Nikkei 225 down by 2.90 per cent and 2.04 per cent, respectively.
Yesterday, the US indices closed in the red. Dow Jones, which fell by 4.01 per cent, recorded its worst inaugural day decline, according to Bloomberg. Even S&P 500 and Nasdaq were down 5.28 per cent and 5.78 per cent, respectively. State Street, the largest money manager for institutions in the US, tumbled 59 per cent after unrealised bond losses almost doubled.
The market breadth was quite negative. Out of the 2,493 stocks traded, 720 advanced and 1,669 declined.
Amitabh Chakraborty, head (equities), Religare Securities, said that after President Obama’s speech, there were fears in some quarters that outsourcing could be reduced, which will adversely impact Indian firms.
Besides FMCG, which was up marginally by 0.84 per cent, the other sectoral indices fell sharply. Metals was down 4.07 per cent, power 3.91 per cent, bankex 3.91 per cent and oil & gas 3.78 per cent.
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Among stocks, Sterlite went down by 7.97 per cent, HDFC 7.49 per cent, Tata Power 7.32 per cent, ICICI Bank 7.12 per cent, Grasim 5.96 per cent and Wipro 3.35 per cent.
FIIs were net sellers of Rs 786.62 crore and domestic institutional investors (DIIs) were net buyers of Rs 282.73 crore.
According to Rajesh Jain, CEO, Pranav Securities, tomorrow will be a very crucial day as the results of RIL and Bharti Airtel will be announced.