Free fall ensues on global cue

STOCK REPORT

The Sensex shed 471 points to end at its lowest close in nearly five months, as investors sold to check losses, extending the global rout in equities which had started Tuesday with a 9 per cent fall in Chinese markets.

Sustained selling by retail and foreign institutional investors alike triggered margin calls by brokers, dealers said.

Key Asian markets fell 3-4 per cent on Monday as weak consumer confidence in the US fuelled concerns over slowdown in earnings from exports to the world's largest economy and Asia's biggest market.

European markets were also trading weak.

The Sensex and Nifty have fallen around 16 per cent from their lifetime highs touched not more than a month ago.

"Nifty has strong support at 3550, but if it breaks that, the index should bottom out at 3200," an institutional dealer said.

CNX Midcap Index ended down 5.1 per cent and S&P CNX 500 Index was down 4.3 per cent. The BSE Capital Goods Index was down 5.5 per cent and BSE Auto Index fell 5.2 per cent.

The combined turnover on NSE and BSE was Rs 12,500 crore.

Dealers said the current fall in indices would continue only as long as overseas weakness persisted as economic fundamentals were in favour of Indian capital markets.

Rating agency Crisil said on Monday in a note that it expects India's economic growth to moderate to 8.4-9.0 per cent in 2007-08 amid overheating concerns.

Crisil said growth momentum is more vulnerable to high inflation and overheating in the domestic economy than overseas factors.

"But with GDP growth expected at around 8 per cent, the fiscal targets for 2007-08 appear to be within reach," the agency said.

The worst hit on Nifty were Jet Airways, down 9.7 per cent at Rs 542, Steel Authority of India, down 8.5 per cent at Rs 97, and Mahindra and Mahindra, down 8 per cent at Rs 709.

Steel shares ended down across the board as the government asked companies to partially roll back price hikes announced after the Budget.