Sensex follows global indices, plunges 725 pts

REGULATORS STEP IN AS MARKETS SUFFER ANOTHER MONDAY MELTDOWN

The Sensex today slumped to its lowest in more than two years as the credit crisis deepened in Europe, reinforcing concern the global economy would slow.

That the worst is not over is evident from the Dow Jones falling below 10,000 for the first time since October 2004 in initial trade.

It was a Black Monday for stocks across the globe. The Sensex tumbled 724.62 points, or 5.8 per cent, to 11,801.70, the lowest since September 12, 2006. The S&P CNX Nifty on the National Stock Exchange (NSE) fell 5.7 per cent to 3,602.35. Nifty futures for October delivery fell 5.2 per cent to 3,640.

All 30 frontline stocks ended in the red, with some heavyweight stocks touching two-year lows.

The bear run jolted the entire Asian economy today, as the Foreign Institutional Investors (FIIs) and hedge funds continued to sell in emerging markets. In India, FIIs sold stocks worth Rs 1,169.33 crore according to provisional NSE data.
   

RUPEE WEAKENS
Prev Close (Oct 03)	47.06
Open	47.40
High	47.85
Low	47.26
Close	47.81

Consumer durables, realty and metal were the biggest casualties. The BSE’s sectoral indices consumer durables lost about 11 per cent, while realty and metal dropped 10 and 9.3 per cent, respectively.
 

CRUDE OIL #
	Oct 06	Chg*

Nymex89.60-4.28 Brent84.90-5.35 * over previous close
# till 11:15 pm (IST)

Hiten Sampat, head of institutional equities, Parag Parikh Financial Advisory Services, said the US credit fear was gradually taking over the Asian markets. Internationally, the hedge funds are facing their quarterly redemption pressure, and the FIIs are pulling out of their investments, irrespective of the valuations. Commodity prices have touched their expected lows and the realty sector is expected to see more corrections.

Anand Tandon, head of research at Bric Securities, said he wouldn’t be surprised if the index touched four digits. “Till now, we haven’t seen redemption pressure from domestic mutual funds, but once that begins, there could be more aggressive selling, which would create more downside risks,” he said.

Reliance Industries, the country’s largest private sector firm in market capitalisation, fell about 7 per cent to Rs 1,641.90 on the BSE. HDFC Bank lost about 5.6 per cent at Rs 1,201.90, while heavyweight stocks like ICICI Bank fell about 3 per cent to Rs 490.45. Realty giant DLF and metals major Tata Steel lost 10.33 per cent and 11 per cent, respectively, to close at Rs 301.65 and Rs 350.25.

Some market players, however, see a silver lining following the Sebi decision to lift the curbs on participatory notes and the Reserve Bank of India’s move to cut the cash reserve ratio.

Manish Sonthalia, vice-president, equity strategy, Motilal Oswal Financial Services, said: “I think we are somewhere close to the bottom of the market, and the twin decisions could boost market sentiment tomorrow.