Sensex up 864 pts after Fed cut, but concerns on FII outflows remain. | |
| After the rout of the last two days, the Indian stock market joined an Asian rally today to hit its highest intra-day gain buoyed by last evening's emergency 75 basis points interest rate cut by the US Federal Reserve. |
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However, the outlook for tomorrow appears uncertain with US index futures in London, which begins after the close of most Asian markets, trading lower after the European Central Bank (ECB) ruled out similar rate cuts.
But there was no respite for the US markets, as stocks continued to fall for the sixth day, the longest losing streak since 2002. |
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At 11.20 pm local time, the Standard & Poor's 500 Index slid 36.22, or 2.76 per cent, to 1,274.28. The Dow Jones Industrial Average declined 287.93, or 2.41 per cent, to 11,683.26. The Nasdaq Composite Index tumbled 85.77, or 3.74 per cent, to 2,206.50.
| Indices | Value | Net chg | % chg | | DOW JONES* | 11,683.26 | -287.93 | -2.41 | | FTSE 100 ** | 5,609.30 | -130.80 | -2.28 | | Asian Index | Jan 23,08 | Change | % chg | | HANG SENG | 24090.17 | 2332.54 | 10.72 | | JAKARTA COMPOSITE | 2476.28 | 181.75 | 7.92 | | SHANGHAI SE COMPOSITE IX | 4703.05 | 143.30 | 3.14 | | NIKKEI 225 | 12829.06 | 256.01 | 2.04 | | TAIWAN TAIEX | 7408.40 | -173.56 | -2.29 | | *as on Jan 23, 23:20 Hrs (IST)
** as on Jan 23, 23:00 Hrs (IST) |
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| Foreign funds continued to sell in the cash market today. On Tuesday, they sold a net of Rs 3,021.54 crore, taking their total net sales this month to nearly Rs 21,000 crore. Domestic institutions bought a net of Rs 1,291 crore "" much lower than yesterday's Rs 2,778 crore. |
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| News that Reliance Power will speed up refunds to Qualified Institutional Bidders for its recently closed initial public offer acted as a sentiment-booster as investors judged more liquidity in domestic market in the coming days. |
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| Today's rise saw Indian market cap gaining Rs 3,38,403 crore "" still Rs 12,22,563 crore away from the peak. |
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| "It looks like a relief rally. The Indian market will remain volatile at least for the next week," said Shahina Mukhdam, head of research at IDBI Capital Markets. |
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The Bombay Stock Exchange's benchmark Sensex closed at 17,594.07, up 864.13 points, or 5.17 per cent, its biggest single-day close since 14 November.
| TOP 5 SINGLE-DAY GAINS | | Date | Sensex
Close | Gain* | Gain
%* | | 14-Nov-07 | 19929.06 | 893.58 | 4.69 | | 23-Oct-07 | 18492.84 | 878.85 | 4.99 | | 23-Jan-08 | 17594.07 | 864.13 | 5.17 | | 09-Oct-07 | 18280.24 | 788.85 | 4.51 | | 29-Oct-07 | 19977.67 | 734.50 | 3.82 |
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| The market, as expected, opened higher by 685.32 points, or 4 per cent, before rising higher. The index is still down nearly 12 per cent from a week ago, and 21 per cent from the all-time intra-day high of 10 January. |
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NSE's S&P CNX Nifty closed higher by 6.21 per cent, or 304.1 points to end at 5203.40.
| TOP SENSEX GAINERS | | Name | Jan 23 | % Chg* | | REL | 1,989.95 | 15.94 | | NTPC | 223.70 | 13.73 | | Satyam Comp | 393.10 | 10.84 | | TCS | 867.10 | 8.48 | | RIL | 2554.85 | 8.35 | | ONLY LOSER | | Bharti Airtel | 846.75 | -0.30 | | * Over previous close |
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| The Indian market, which had some help from the banking system and cues from Asian markets, was lifted by select large-cap stocks like Reliance Industries (up 8.35 per cent to Rs 2,554.85). |
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| Bellwether Asian indices rebounded from the biggest two-day drop in 18 years with the MSCI Asia Pacific Index adding 3.9 per cent today. |
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| In India, battered sectors such as real estate (up 11.44 per cent), oil & gas (8.73 per cent) and power (9.8 per cent) saw most gains. They are still down 17 to 21 per cent from the week-ago period. |
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| The rally in the domestic market was narrow with 1,401 stocks ending in negative territory compared to 1,300 advancing stocks. Also, an overwhelming 980 stocks, all small- and mid-caps, hit the lower circuit today, continuing the fall of the last two days. |
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| "The steep Sensex fall has proved two of our fears: that the Indian market is linked to the world if the global slowdown is not mild; and foreign flows are the biggest driver of the market," said Nilesh Jasani, research analyst with Credit Suisse, in a note to clients today. |
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| "For a value investor who does not have positive views on external flows, only a Sensex fall below 13,000 would represent an entry point justified from a valuation viewpoint," the note added. |
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| Dealers said the rise in the Japanese yen today will also trigger more pressure on stocks across the world, including India. |
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| Reliance Energy, which gained 16 per cent to Rs 1,984.95, was the biggest gainer on the Sensex. But it is still much below its recent high. |
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