Powered by higher than estimated GDP growth, the stock markets today staged a smart recovery after an initial crash. |
On a day when trading was expected to be weak with negative cues coming in from global markets, the Sensex ended 388 points down at 10,398.61. The Nifty, which touched an intra-day low of 2972.90, closed with a loss of 114.25 points or 3.59 per cent at 3,071.05. |
|
Negative sentiment due to the continued weakness in global markets and sustained FII outflows enveloped the markets in the morning. The Sensex plunged to an intra-day low of 10,112, a loss of 675 points. |
|
The sharp downslide was due to a massive pullout by FIIs, which have been net sellers since May 15, as well as a world-wide crash in equity. |
|
As per figures released by Sebi, FIIs have withdrawn over Rs 7,500 crore in the last 12 trading days. The impact of weak global markets persisted beyond opening trade and the BSE Sensex slumped sharply under acute selling pressure. |
|
Among overseas indices, the Nikkei finished 392.12 points lower at 15467 today, its lowest level since February. US stocks tumbled overnight on Tuesday as higher crude oil prices and a disappointing sales report from Wal-Mart stores fuelled worries about a potential slowdown in consumer spending. |
|
The Dow Jones industrial average fell 1.63 per cent to end at 11,094.43. The Standard & Poor's 500 Index dropped 1.59 per cent to finish at 1,259.84. The Nasdaq Composite Index fell 2.06 per cent to close at 2,164.74. |
|
Rahul Rege, senior vice-president, Sharekhan said, "Today's initial downfall was a complete reflection of global markets. The market currently lacks depth and so any kind of selling magnifies the fall. Later in the afternoon trade, auto and cement stocks managed to partly rub off their losses due to some buying support from fund houses." |
|
Going ahead, experts are quite positive about the India Inc growth story. "The India story is getting ignored and in the process market players are becoming overly bearish. When the index was at 12k levels, everyone was predicting 14k levels and now when the Sensex is at 10k levels, they feel that it will touch 8k levels. But one has to take a balanced approach and needs to consider fundamentals keeping close watch on global markets and commodity markets," feels Rege. |
|
Finance Minister P Chidambaram ruled out any impact of the fall in stock markets on consumer demand, attributing FII sales partly to a global meltdown. |
|
Buoyed by the 8.4 per cent economic growth in 2005-06, Chidambaram said more structural, legal and administrative reforms were needed, particularly in mining and electricity sectors, to sustain the higher growth rate. |
|
Pankaj Shah of Transwarranty Finance said, "Today's fall was triggered by global markets and lack of buying interest by the investing public as well as the selective and low-volume buying by domestic funds. Still the investors are trying to find out the bottom at which the market will stabilise and are still cautious about entering the market. My advice is that buying in the falling market at around this level will give good returns to long-term investors." |
|
|
|