Share prices tumbled even as the US senate approved the $700-billion package to rescue the world economy from slowdown. Foreign institutional investors (FIIs) pulled out funds from India, knocking 529 points from the Sensex. The 30-share index closed at 12,526 points, losing 4%. The NSE CNX Nifty shed 3.36%, or 132 points, to end at 3,818 points.
Stocks related to commodities eroded heavily. Bombay Stock Exchange?s metal index declined 7%, or 634 points, at 8,417 points. The BSE oil & gas index shed 5.74%, or 512 points, to close at 8,426 points. Alex Mathew, head, research centre, Geojit Financial Services, said metal stocks suffered due to the turmoil in the world commodity market. ?IT sector also witnessed heavy selloff on expectation of lower margin growth, and fear of a slowdown in the US financial sector,? he said. BSE IT shed 3.34%, or 107 points, to close at 3,110 points.
Research firm EPFR Global said the US remains for many investors the safest option even with its government arguing furiously over the details of a record-setting rescue package for its financial sector. ?During the week ending September 24, they pulled another $9.5 billion out of EPFR Global-tracked bond and equity funds geared to emerging and global markets, committed $10 billion to US equity funds and returned $11 billion to money market funds. Several sector funds also attracted significant flows, some of which went to establishing short positions in major exchange traded funds (ETFs), and Japan equity funds posted inflows for the first time in nine weeks,? said the EPFR report.
The BSE Bankex lost 3.88%, or 259 points, to end at 6,428 points. All other sectoral indices ended in the red.
As per the provisional figures released by BSE, FIIs have sold stocks worth Rs 1,662 crore. The market players mostly believe the US bail-out package may not help the global market skirt slowdown.