Losses mount, Sensex tumbles 700pts

The markets were trading near day’s low amid rout in global equities after the Federal Reserve steered away from announcing quantitative easing three. The Nifty plunged 200 points, at 4,930 and the Sensex declined 678 points, at 16,392.

---------------------------------Updated at 14:30 hrs

Markets opened in red this morning after the Federal Reserve and the International Monetary Fund revived recession fears, causing flight to safety. The Nifty slipped below the 5,000-mark and touched a low of 4,974 following sharp cuts in Asian and European equities during the opening trades.

In Asia, Hong Kong’s Hang Seng index tumbled over 5%, China’s Shanghai Composite declined 3% and Japan’s Nikkei Stock Average has slipped over 2%. In Europe the CAC, DAX and FTSE are down over 3% each.

The Federal Reserve launched a new package of measure to support the limping economy which was dubbed as ‘Operation Twist’, where the Fed would buy long term bonds and sell short term bonds worth $400 billion. However, market participants did not cheer the Fed’s latest efforts. Moreover Fed’s statement that the economy faced downside risks renewed fears of a double dip recession.

All the components on the Sensex were trading in the red. Reliance Industries, ICICI Bank and Larsen & Tourbo were the top losers, down over 3%, and they dragged the Sensex down by 130 points.

Metal shares also lost sheen on concerns that the global growth slowdown may dampen demand. Sterlite Industries and Jindal Steel fell almost 5%, and Hindalco slipped over 3%.

From the realty space, DLF and HDIL were on broken ground, down around 6% each and Indiabulls Realestate declined 5%.

The market breadth was extremely negative, 2,052 stocks declined for only 637 stocks that advanced.