London blasts rip through markets

Sensex slumps 142 points; rupee hits 3-week low.

The Bombay Stock Exchange sensitive index fell nearly 2 per cent and the rupee hit a three-week low after a series of terror blasts across London rattled financial markets across the globe today.

The Sensex slump of 142.47 points, its biggest single-day fall since April 15, 2005, eroded Rs 31,756 crore of investor wealth in just a day's time in tune with the downtrend in European stock markets. In early morning trade, the Dow fell 76 points.

Hemang Raja, CEO and managing director, IL&FS Investmart, said, "The correction was long overdue and today's flash of terrorist attack in London worked as a trigger for the collapse. But the markets are expected to bounce back as there is enough liquidity and expectation of a good corporate performance."

Naresh Kothari, executive president, Edelweiss Capital, said, "The market was looking for an excuse to correct and it did. The impact of today's blasts may have a repercussion for the next few days across the globe."

The breadth of the market was highly negative with 1686 stocks declining against 813 advancing. Of the 30 shares in the BSE basket, only four stocks ended positive.

The volumes accounted for Rs 3765.53 crore on the BSE and Rs 6789.18 crore on the National Stock Exchange (NSE).

The biggest loser among the Sensex stocks were Reliance Industries (down 4.84 per cent to Rs 613.85), ONGC (4.66 per cent to Rs 929.35), Hindalco (3.69 per cent to Rs 1211.25), Wipro (3.39 per cent to Rs 710.30), Reliance Energy (3.24 per cent to Rs 627.15) and HLL (down 2.82 per cent to Rs 158.30).

But the blasts did not have any significant impact on Indian GDRs in early trade. The Instanex Skindia DR Index (ISDI) was up 0.22 per cent to 1,321.71. Among ISDI GDR stocks, two advanced, one remained unchanged and four lost ground.

All sectoral indices ended in the red indicating that the selling pressure was across the board. Foreign institutional investors were net buyers worth Rs 387.80 crore, while domestic mutual funds were net sellers to the tune of Rs 37.60 crore.

A technical analysts said the indices had cracked below their short-term supports and the Nifty had exhibited weakness by closing below the 2211 mark. The next support at the 2191 had also been violated.

The Nifty has support at the 2163/2151 levels which are likely to be the immediate floor levels. Any break below the 2151 level with heavier volumes will reverse the short-term trend with serious implications in the near-term

Meanwhile, gold and silver saw heavy buying in London early this evening and gained by over one per cent in international trade. Spot gold prices in Europe are expected to touch the $430 per troy ounce level while silver is seen to hit the $7.08 per troy ounce mark on the back of fund interest.

However, analysts said this was a temporary phenomenon and that they were awaiting the non-farm payrolls data, expected tomorrow, which would determine the movement of both the precious metals.

The spot rupee fell to 43.67 to a dollar after opening at 43.60/61 to a dollar. However, the panic dollar-buying was countered partly by selling by exporters who were sitting on the fence with the rupee ruling at 43.50-60 for quite some time, said dealers.

Government securities on the other hand opened on a weak note but prices recovered with the fall in the US 10-year treasury yields and crude prices.

The 10-year yields of US treasury bonds fell from 4.09 per cent to 3.96 per cent and oil prices moderated to $57.50 per barrel from a high of $61 per barrel.