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| Sensex tanks 626 pts on global cues, monsoon worries |
| BS Reporter / Mumbai Aug 18, 2009, 00:13 IST |
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Realty and metal stocks lead the fall.
Fears of drought and worries about growth rates in China and Japan, respectively Asia's largest and the world's second largest economies, saw Indian and global indices slide sharply.
The Bombay Stock Exchange’s Sensitive Index, or Sensex saw its steepest decline since July 6, falling 626.71, or 4.1 per cent, to 14,784.92. The benchmark has dropped 5.7 per cent so far this month. The S&P CNX Nifty lost 4.2 per cent to 4,387.90.
Foreign Institutional Investors (FIIs) were net sellers of Rs 1,226.49 crore, although domestic institutional investors (DIIs) were net buyers of Rs 460.32 crore, according to provisional data from the BSE.
“Markets could witness around a 10 per cent correction, but there is a high amount of liquidity in the system that can support them. If liquidity moves away in the short run, there could be a 20 per cent correction,” said Andrew Holland, head (institutional equities), Ambit Capital
The China factor, he added, will have to be watched since markets there are already down 17 per cent.
Domestic concerns like the poor monsoons in parts of north India continued to worry foreign institutional analysts. “Indian stocks may decline as much as 15 per cent on concerns that lower monsoon rainfall will slash farm output and cut consumer spending,” wrote Bank of America Merrill Lynch analyst Jyotivardhan Jaipuria in a report.
Market experts said Japan’s GDP growth at 3.7 per cent was below Bloomberg analysts’ median expectation of3.9 per cent. In China, Yunnan Copper, the country's third-largest producer of the metal, fell 10 per cent after posting a loss in the first half of the year. Both the Shanghai copper and zinc hit their lower circuits.
The Shanghai Composite Index slipped 5.8 per cent or 176.34 points.
The Nikkei-225 and Hang Seng fell 3.10 and 3.62 per cent respectively. The MSCI Asia Pacific index took its biggest hit in five months.
US markets closed in the red on Friday after the consumer confidence dropped. Both the Dow Jones Industrial Average and Nasdaq fell by 0.82 per cent and 1.19 per cent.
In India, market breadth was negative with 3,036 stocks declining, 823 rising and 95 closing unchanged.
Realty and metal stocks led the fall, with HDIL, DLF, Sterlite, Tata Steel and Hindalco all falling significantly.
| A 'CORRECTION' |
| Global markets react |
| |
% chg**
|
| Asia |
|
| Shanghai Composite |
-5.79 |
| Hang Seng |
-3.62 |
| SET |
-3.39 |
| Nikkei 225 |
-3.10 |
| Kospi |
-2.79 |
| Europe |
| CAC |
-2.16 |
| DAX |
-2.02 |
| FTSE 100 |
-1.46 |
| Americas* |
| Nasdaq |
-2.45 |
| S&P 500 |
-2.07 |
| Dow Jones |
-1.66 |
| * till 1200 IST ** over previous close |
| Top Sensex losers |
| |
Price (Rs) |
% Chg |
| DLF |
364.40 |
-7.75 |
| Hindalco |
100.25 |
-7.35 |
| Tata Steel |
437.70 |
-6.82 |
| Sterlite Ind |
618.05 |
-6.69 |
| Tata Motors |
435.65 |
-6.67 |
| Jaiprakash |
202.75 |
-6.31 |
| Reliance Infra |
1112.6 |
-6.15 |
| Hero Honda |
1390.65 |
-5.92 |
| ITC |
221.65 |
-5.56 |
| M & M |
746.80 |
-5.31 |
| Note: There were no Sensex gainers |
The realty index was down 7.58 per cent and metals 6.15 per cent, but all sectoral indices closed in the red. Auto, oil & gas, bankex and FMCG were down over 4 per cent.
Aviation stocks ended in red as the price of aviation turbine fuel increased 4.5 per cent. Kingfisher Airlines dropped 8.58 per cent while Jet Airways slumped 7.26 per cent and SpiceJet declined 3.97 per cent.
Some market players, however, were not too perturbed with this fall. Said Ramdeo Agarwal, joint partner, Motilal Oswal,“I am quite surprised by the extent of this fall. In the medium- and long-term, the undercurrent continues to be positive, but in the short term, we are in the realm of no knowledge.”
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