India the worst performer in Asia.
Fire-selling by foreign institutional investors (FIIs) pulled the market down in the last few hours of trading as the benchmark index, the Sensex, closed below 10,000 for the first time since July 2006.
The Sensex closed at 9,975.35 points, down 606.14 points, or 5.73 per cent. The broad-based Nifty-50 closed at 3,074.35 points, down 194.95 points, or 5.96 per cent. The Indian market was the worst performing market in the Asian pack today (see table).
Stocks also dropped on concern the US stock market's wildest swings since 1929 may get even bigger as almost 80 million options expire today. The Chicago Board Options Exchange Volatility Index, a measure of expected share-price swings and option prices, surged to an intra-day record 81.17 yesterday. It dropped 2.4 per cent to 67.61 at the close of trading. Meanwhile, US stock futures opened weak as data indicating that housing starts slid in September spooked the market.
In India, heavy selling in stocks such as Reliance Industries (down 6.58 per cent to Rs 1,305.25 a share), DLF (down 10.34 per cent to Rs 291.3 a share) and Reliance Infrastructure (down 11.96 per cent to Rs 490.75 a share) indicates that overseas hedge funds facing redemptions had to liquidate entire portfolios, said brokers.
| GLOBAL MARKETS ERRATIC | |||
| Asia | 17-Oct | Net Chg* | % Chg* |
| Hang Seng | 14554.21 | -676.31 | -4.44 |
| Jakarta Composite | 1399.42 | -63.83 | -4.36 |
| Straits Times | 1878.51 | -72.69 | -3.73 |
| Kospi | 1180.67 | -33.11 | -2.73 |
| Shanghai Composite | 1930.65 | 20.71 | 1.08 |
| Nikkei 225 | 8693.82 | 235.37 | 2.78 |
| Europe | |||
| CAC 40 Index | 3269.12 | 148.92 | 4.68 |
| DAX Index | 4739.35 | 158.52 | 3.43 |
| FTSE 100 Index | 3953.44 | 201.62 | 5.22 |
| America# | 16-Oct | Net Chg* | % Chg* |
| Nasdaq 100 | 1312.97 | 31.94 | 1.86 |
| Dow Jones | 8979.26 | 146.63 | 1.63 |
| *over previous close # till midnight (IST) | |||
Mid-cap and small cap indices fell as margin financiers dumped the stocks of the company promoters who had borrowed money recently. The BSE mid-cap index fell by 3.07 per cent to close at 3,545 points while the small-cap index fell by 2.76 per cent to end at 4,168 points.
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Chartists feel that the markets are in the middle of a downtrend and supports are not relevant in the current situation. It is the global cues that would continue to guide the Indian markets. "Currently, we are in the middle of a downtrend that began in August. Even for a new medium term uptrend, the Sensex has to touch 11,900 levels while for a bull market, it has to go to 15,500," said Deepak Mohoni of Trendwatch India.
The total volume on both exchanges in the cash segment was Rs 14,469 crore while in the futures and options segment it was Rs 43,780 crore. Foreign institutional investors sold equities worth Rs 915.54 crore and domestic institutional investors bought equities worth Rs 712.77 crore, provisional data from the BSE show.