Sensex dips 92 pts on global jitters

The overall weakness in global markets, triggered by a slump in technology stocks last week, continued to weigh on Indian equity indices on Monday.

Lack of buying support in the domestic market was evident as investors saw no reason to commit themselves to fresh positions.

However, some value-buying was reported at lower levels that helped the markets bounce back from an intra-day low of 6,118.42, a good 130 points off Friday's close. The Sensex recovered to close 1.47 per cent (91.56 points) down at 6,156.78. The Nifty closed 28.50 points lower at 1,927.80.

Tech-heavy indices all across Asia were battered after fears of a slowdown in the global economy took root in the US markets on Friday, coupled with IBM's disappointing results.

Japan's Nikkei 225 closed 3.8 per cent lower, Thailand's benchmark SET lost 3.06 per cent and Taiwan's weighted index was down 2.94 per cent.

The selling wave swept through Europe in the course of the day, after Royal Philips Electronics posted first-quarter earnings that missed estimates. Germany's DAX index was down 2.33 per cent by mid-day trading (local time) and France's CAC-40 was off 1.74 per cent. The FTSE in London was trading 1.26 per cent lower.

Meanwhile, trading in the derivatives segment of the National Stock Exchange (NSE) was interrupted by a technical snag in the afternoon. Brokers said there were delays in receiving confirmation in the future and options (F&O) segment in the morning and trading was eventually closed for less than an hour in the afternoon. NSE officials confirmed a technical snag in the system and said trading was closed at 2.12 pm but resumed at 3.10 pm.

The breadth of the market was negative, with losers outnumbering gainers 13:10, amid a modest trading volume of Rs 1,685 crore on the Bombay Stock Exchange. The Tata Motors stock led the list of gainers, rising by 2.58 per cent to Rs 420.85. The Maruti Udyog scrip gained 2.45 per cent to Rs 415.65 and Larsen & Toubro closed with gains of 1.12 per cent to Rs 963.25.

A technical analyst at Karvy Stock Broking said, "The Sensex witnessed the creation of a breakdown gap on Friday, which will be an important determinant for future price movements in the Sensex." The Sensex had opened with a gap of 100 points at 6,339.73 on Friday against the previous day's close of 6,449.33, he explained.

The markets bounced back from lower levels purely on buying in blue-chip counters, said a BSE broker. Among the frontline stocks index heavyweights such Reliance Industries (down 2.35 per cent to Rs 517.25), Hindustan Lever (down 2.15 per cent to Rs 129.45) and ONGC (down 2.19 per cent to Rs 828.10) dragged down the index.

Metal stocks were hard hit as investors reasoned that a slowing global economy would hit commodity prices hard. The SAIL scrip (down 7.92 per cent to Rs 54.05), Nalco (down 5.17 per cent to Rs 154.10), Tata Steel (down 3.55 per cent to Rs 353.25) and Hindalco (down 2.23 per cent to Rs 1,229) were the main losers.