Investors in India’s stock markets received warning of more black days ahead with intra-day trade on the last day of Samvat 2064 swinging wildly before recovering on some aggressive buying by domestic institutional investors (DIIs).
The Bombay Stock Exchange’s benchmark 30-share Sensex swung 812 points before ending 192 points lower at 8,509.56 points, 2.2 per cent below Friday’s close.
The Sensex has dipped 55.35 per cent from 19,058 at the start of this Samvat and 35 per cent over the last month, with banking and real estate stocks being the biggest losers.
The broader 50-share Nifty of the National Stock Exchange (NSE) also shed 59.80 points or 2.31 per cent to close at 2,524.20, recovering from the day’s low of 2,252 points.
The VIX, NSE’s volatility index, touched an all-time high of 90.02 before closing at 67.5, an all-time closing high, against Friday’s VIX of 45.5
“This is the worst Samvat year I have seen in the last five decades,” said Kisanbhai Choksey, chairman of KR Choksey Shares and Securities and an active broker since 1961.
| TOP SENSEX LOSERS | ||
| 27-Oct | % Chg* | |
| Tata Motors | 140.05 | -13.95 |
| Mah & Mah | 248.00 | -13.71 |
| Jaiprakash Asso | 53.40 | -10.33 |
| Grasim Ind | 952.65 | -9.57 |
| Tata Power | 570.25 | -8.75 |
| TOP SENSEX GAINERS | ||
| Oct 27 | % Chg* | |
| Bharti Airtel | 566.45 | 5.99 |
| Reliance Ind | 1074.70 | 5.83 |
| Reliance Infra | 396.60 | 3.97 |
| Reliance Commun | 200.40 | 3.62 |
| Sterlite Ind | 215.75 | 3.40 |
He added that led by the exodus of foreign investors, this was the fastest drop in share prices. “Whenever such a fall has occurred, it has eclipsed everything,” he said.
DIIs stepped in, buying Rs 916 crore worth of shares on the spot market after the Sensex plunged 1,004 points to a three-year intra-day low of 7,697.39 on a selling spree triggered by a global meltdown. Most Asian indices hit more than four-year lows during the day.
A group of state-owned banks are understood to have bought stocks worth Rs 250 crore in the last three sessions.
Brokers reported some short covering by Foreign Institutional Investors (FIIs), who sold Rs 1,027.30 crore worth of shares, according to provisional BSE data. FIIs have been responsible for the selling spree since September 15, when the crisis began with US investment banker Lehman Brothers filing for bankruptcy.
The market was highly volatile also due to the expiry of the derivative series on Wednesday in view of the Diwali holidays on October 28 and 30. However, there will be a “Muhurat” trading session to usher in the new Samvat between 6.15 pm and 7.15 pm on October 28.
Despite today’s recovery, Amar Ambani, vice-president, equities, India Infoline, predicted that there is “some pain left in the coming days” because the impulses for FII selling remain and global worries are not over yet.
“I would hazard a guess that the Sensex might drop to 6,500 and Nifty below 2,200,” he added.
| GLOBAL MARKETS SLUMP AGAIN | |
| ASIA |
% Chg* |
# at 11:10 pm (IST)
S Ramesh, COO of Kotak Mahindra Capital, said: “On the back of falling crude prices resulting in lower inflation and lower interest rates, we should see the markets stabilising in the next three or four quarters. The real economy, however, could see some pain in the near to medium term.”
Dharmesh Mehta, equities head at ENAM Securities, suggested that this is a good time for investors to put their money in equities “because India’s strong growth story could provide substantial gains”. He predicted that “by next Diwali the Sensex could trade around 15,000 levels”.
