No respite from US woes, markets remain jumpy

Sensex losses erode Rs 2,29,308 cr market cap in 9 sessions.

Domestic stocks fell to their lowest level since July 6 on global equities sell-off on concerns that losses in the US mortgage market would impact the world's biggest economy.

With Monday's fall, the benchmark Sensex has lost nearly 1,000 points in nine trading sessions, wiping off Rs 2,29,308 crore in market capitalisation.

The fall in Indian equities mirrored the fall in European and other Asian stock market rout, which shaved off $2.66 trillion from global equities. The Dow Jones industrail average was up 127.22 points or 0.97 per cent at 13,309.13 at the time of going to press.

"The big volatility in Indian markets and the resulting fall is due to global cues. We are reacting to the US subprime woes," said Seshadri Bharathan, director (stock broking) at Dawnay Day.

The Sensex opened with a huge negative gap of 245 points at 14,893 on the back of weak cues from global markets. The index soon tumbled to a low of 14,706 "" down 432 points from its last close.

The index witnessed a minor pullback of 100-odd points in noon deals. A fresh round of buying towards the end of the day saw the index recover some more lost ground before settling at 14,903 "" down 235 points from Friday.

The NSE-50 index of the National Stock Exchange slid 62.05 points, or 1.4 per cent, to 4,339.50. Nifty futures for September delivery lost 44.35, or 1 per cent, to 4322.

Experts said foreign institutional investors (FIIs), who had been major sellers in the last two weeks, might be booking profits in India to offset losses in the US. It is estimated that the FII investments in India of around $50 billion have grown to $200 billion, making them book a part of the profits in the country as slowdown concerns in the US loom.

The rupee fell the most in more than a week after FIIs sold Rs 1,395 crore worth of stocks on Monday. The rupee ended the day 2 per cent lower at 40.41/42 against the dollar.

Sriram Iyer, head of research at Edelweiss Securities, said the current fall in prices would offer opportunities for investors to pick quality stocks.

Hindalco, which shed 3.05 per cent to Rs 157.45, dropped the most among the Sensex stocks, followed by ICICI Bank (down 3.03 per cent to Rs 887.60), Maruti Udyog (down 2.95 per cent to Rs 825.20), Reliance Communications (down 2.92 per cent to 531.55) and Larsen & Toubro (down 2.86 per cent to Rs 2,448.50). Reliance Industries fell 1.1 per cent, to Rs 1,782.15. Overall, 24 of the 30 stocks in the Sensex declined.