Sen*** now below 16,000
BS Re****ter / Mumbai March 8, 2008
Steepest weekly decline since May 2006.
Spooked by falling global markets and higher-than-estimated inflation
figures, Indian markets on Friday plunged to their steepest weekly decline
since May 2006, shaving off Rs 2,08,361 crore in market capitalisation.
The outlook for next week also looks bleak with stocks in Europe (which
opens in the latter half of trading hours on the Indian markets) and US
stock futures falling on concern that credit-market losses will deepen for
financial companies and an employment re****t may show that the US has
slipped closer to recession.
With the dollar falling to its weakest in three years against the Japanese
yen, foreign funds, which have used the cheap Japanese currency to buy
stocks in emerging markets like India, are under pressure, said dealers.
he Bombay Stock Exchange's (BSE's) 30-share Sen*** fell 566.56 points, or
3.42 per cent, to close at 15,975.52 points, its lowest level since
September 18, 2007. The 50-share Nifty index of the National Stock
Exchange
closed for the week at 4,771.6 points, lower 149.8 points, or 3.04 per
cent.
Real estate, power and bank stocks were the worst hit in Friday's mayhem.
With Friday's fall, the Sen*** has lost 4,897.81 points or 23 per cent
from
its peak on January 8 of 20,873. This week alone has seen the index
falling
by 1,603.2 points, or 9 per cent.
This is the biggest weekly loss since May 15 to 19, 2006, when the Sen***
lost 10.96 per cent (1,346.50 points). This is also the biggest
post-budget
weekly fall for the benchmarks.
Foreign institutional investors (FIIs) continued to be net sellers
throughout the week. In March so far, they have net-sold equities up to Rs
35,000 crore. Domestic institutional investors bought Rs 20,000-odd crore
this month, but could not counter FII selling pressure.
Market breadth remained extremely weak with only 295 stocks advancing
against 2,384 stocks declining.
160 stocks hit the lower circuit in Friday's trading session with only six
stocks in the upper circuit, reflecting the absence of buyers in the
market.
Small- and mid-cap stocks suffered the most. This week, the small-cap
index
has fallen 8.5 per cent or 818.34 points and the mid-cap index shed 566.21
points or 7.37 per cent.
The Hang Seng (down 841.4 points or 3.6 per cent), Nikkei 225 (down 432.62
points or 3.27 per cent) and Taiwan Weighted (down 127.26 points or 1.47
per
cent) were deep in the red.
Key American indices, the Dow Jones Industrial Average (down 214.6 points
or
1.75 per cent) and S&P 500 index (down 29.36 points or 2.2 per cent) had a
dismal trading session on Thursday after news that Thornburg Mortgage Inc,
a
mortgage lender, was in default after failing to meet creditor demands for
more upfront cash.
"The market is reacting to any bad news on the global front. Purely on the
basis of fundamentals, Indian markets are in a buying zone. A lot of large
caps are now moving towards value. Markets have factored in a slowdown in
cor****ate earnings and hence that is not likely to affect the market
sentiment in a significant way," said Amar Ambani, Vice President
(Research), India Infoline.
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