The domestic equity bourses succumbed to global credit worries in line with other Asian markets as the sub prime crisis resurfaced following the announcement from US-based Citigroup that it may suffer up to $11bn in write downs for sub-prime losses. As a result the 30-share Sensex of the Bombay Stock Exchange (BSE) closed the day in the red at 19,590.78 points losing 385.45 points or 1.93%. On the other hand the broader Nifty of the National Stock Exchange (NSE) ended the day at 5,847.30 points losing 85.1 points or 1.43%. Majority of the Asian indices traded lower on Monday with Hong Kong?s Hang Seng losing 1,526.02 points or 5.01% to end the day at 28,942.32 points while Japan?s Nikkei 225 closed at 16,268.92 points down by 248.56 points or 1.50%.
However, market experts back home, feel that the current correction is welcome and healthy that will allow the market to cool itself as it has run too fast.
SP Tulsian, investment consultant, said, ?Since there is no fresh events taking place, domestic market is taking some breathing time to consolidate. If the market corrects by another 1,000-1,500 points, it will be a very healthy sign. Probably for another 10 days the market may be little sub-dued and thereafter we will see a strong bounce back.?
As per the provisional figures released by the stock exchanges (SEs) Foreign Institutional Investors (FIIs) were net sellers to the tune of Rs 1,093.16 crore on Monday. Though large cap stocks faced the music through out the day, small and mid-cap stocks were able to hold their ground. Both the BSE small cap and mid-cap index outperformed the benchmark Sensex by gaining 1.07% and 0.67% respectively following which the broader market breadth in BSE remained positive. In BSE a total of 1,433 stocks gained ground when compared to 1,321 stocks that had declined. However, among the Sensex constituents 26 stocks closed in the negative while only 4 stocks managed to end the day on a high note.
