Sensex slips 770 pts despite Fed booster

Poor production data, global cues take their toll.

Doubts about the Federal Reserve's efforts to aid rescue the US mortgage industry triggered an Asia-wide sell-off in the markets on Thursday wiping off Rs 3,14,288 crore in market capitalisation in India.

Yesterday's fall was the sixth biggest single-day fall but market participants say any rally from here on will be used by scared investors to book profits.

The Bombay Stock Exchange (BSE) benchmark 30-scrip index, Sensex, closed at 15,357.35 points, down 770.63 points, or 4.78 per cent. The broadbased 50-scrip Nifty closed at 4623.6 points, down 248.4 points, or 5.1 per cent.

Sensex has plummeted by 26 per cent from its January peak and touched the lowest point since September 5, 2007.

Since its January peak, Indian markets have shed Rs 23,54,060 crore of market wealth.

All Asian markets fell after the Federal Reserve's $200 billion loan in treasury securities "" the boldest action since the Depression "" was widely thought to be "too little, too late".

Earlier, the US markets had ended on a weak note with key indices, Dow Jones Industrial Average (down 46.57 points or 0.38 per cent), S&P 500 (down 11.88 points or 0.9 per cent), and Nasdaq (down 11.89 points or 0.53 per cent). 
 

GLOOM AND DOOM
Global markets
	Mar 13, '08	Net Chg*	% Chg*
Hang Seng	22301.64	-1121.12	-4.79
Jakarta Composite	2440.59	-115.65	-4.52
Kospi	1615.62	-43.21	-2.60
Nikkei 225	12433.44	-427.69	-3.33
Shanghai Composite	3971.26	-98.86	-2.43
Straits Times	2805.55	-112.39	-3.85
FTSE 100	5692.40	-84.00	-1.45
Dow Jones^	12192.40	82.31	0.66
* over previous close                          ^ up to 11:30 pm

Market participants feel that that yesterday's index of industrial production (IIP) data has dealt a blow to India's perception among investors.

"The three main drivers of the India story have been hit""IT exports are suffering because of currency appreciation, domestic consumption has been impacted by higher interest rates and the easing of pent-up demand. Infrastructure capex has suffered as is evident from a slowdown in construction," said Satish Ramanathan, head of equities at Sundaram BNP Paribas mutual fund.

"It is difficult to say when the pain will end but I would say that we are at least 5 to 10 per cent away from an absolute buy call," he added.

Foreign institutional investors (FIIs) sold equities worth Rs 108.5 crore and domestic institutional investors (DIIs) bought equities worth Rs 56.44 crore on Thursday.

"The problem for DIIs right now is in terms of how much they can step in, since market sentiment has been hit. Market sentiment will be hit for at least the next one month," said Shahina Mukadam, Head-Research, IDBI Capital Markets.

Only a good rebound in international markets can help sentiment stabilise because the problem right now is mainly with liquidity, she added saying the company was advising clients to "selectively pick up stocks with good visible growth such as FMCG, pharma, oil and power pack from a medium-term perspective".

Market breadth remained extremely weak with 345 stocks on the advancing side to 2,332 declines.