Key equity indices fell sharply and upturned the previous day?s gains on the back of weak global cues coupled with growing worries of global recession. The 30-share Sensex of the Bombay Stock Exchange (BSE) lost 696.47 points or 6.61% and closed the day at 9,839.69 points.
Dealers in the market reckon factors such as concern on earnings may deteriorate further as the global financial disaster forces companies to cut output. Announcement of IIP data on Wednesday also had a negative impact on the markets. The broader S&P CNX Nifty of the National Stock Exchange (NSE) was down by 209.60 points or 6.66% and ended the day at 2,938.65 points.
Domestic markets opened the day on negative gap tracking weak global cues and plunged further as retail investors decided to book some profit after Monday?s rally. An analyst from a leading broking house said, ?Though we saw a huge rally on Monday due to strong global cues, the volumes were low. Also, we didn?t have any short positions, so any selling can put pressure on the markets. Fear and panic still prevails and investors are rushing to settle long positions as soon as the market reverses trend.?
Indian bourses kept on hovering in the red terrain throughout the trading session without showing any signs of recovery. Further, ruthless selling in the last trading hours of the day forced the market to extend its losses and beat downward harshly.
All the BSE Sectoral indices ended with huge loses; realty, metal and power being the worst performers. Amitabh Chakraborty, president- equity at Religare Securities Ltd said, ?In the last two days, we have been witnessing domestic institutional investors (DII) also selling with foreign institutional investors (FII), so there are no buyers, which is hurting the markets. We assume that the markets are likely to remain range-bound in the current scenario and will take cues from international markets.? The breadth of the market remained negative since the beginning of the day, as out of 2,602 stocks traded on BSE, only 759 stocks ended in green, 1,766 stocks in red while remaining 77 were unchanged. In the Sensex, 29 stocks declined and only one stocks advanced.
However, some dealers in the market say that at this juncture valuations are very attractive and there might be some buying at the lower level in the coming days.