Thursday, August 18, 2011

Nifty hits 15-month low, ends below 5K on global turmoil

After a few days of relative calm, Indian equity benchmarks closed with enormous cuts, with the NSE Nifty closing at below 5000 for the first-time since June 2010. It was a complete free-fall on Dalal Street on Wednesday, spooked by fears of stammering recovery in the European and US economies after debt crisis.
The 50-share NSE Nifty touched new 52-week intra-day low of 4,932.15, before closing down 112 points at 4,944. The 30-share BSE Sensex fell 371 points, to end at 16,469.79.
On the global front, European markets like France's CAC, Germany's DAX, Britain's FTSE were down 2-3.5%. The Dow Jones futures tumbled 173 points. Major Asian markets like Hang Seng, Shanghai and Nikkei closed down 1-1.6%.
Experts feel that one should learn to live with the pain as the bleeding is going to last long now. Stephen Roach, non-executive chairman of Morgan Stanley Asia said that Euro zone crisis is far from over and may see further adjustments in global equity markets.
Morgan Stanley has cut global GDP growth forecasts to 3.9% and 3.8% in 2011 and 2012 respectively. Roach further warned that both the US and Euro are hovering close to recession.
For India, Roach said, further rate hikes by RBI remains an overhang.
Likewise, Dipan Mehta, Member BSE & NSE too said the central problem with India was inflation and interest rates. He doesn't see any major change in the stance of the Reserve Bank.
"The market could see even lower levels, which cannot be ruled out," he added.
Meanwhile, Deven Choksey, MD of KR Choksey Shrs & Securities Pvt. Ltd said, "Most worried factor in the mind of investors and foreign investors is that this freedom from corruption, which is going to continue for longer period of time. That means the government's attention would be moving away from taking any policy reform decisions and that would significantly affect the progress of the economy going forward."
"The participation from retail investor is absolutely thin but the fund investors are also remaining cautious, generating cash in the portfolio," Choksey added.
Shares of technology, financial and metal companies saw sharp crack with the respective indices falling 2.5-4%.
Shares of technology, financial and metal companies saw major cracks with the respective indices falling 2.5-4%.
Banking majors ICICI Bank and Axis Bank lost 5% each. Largecaps like TCS, SBI, Infosys, Wipro, HDFC, Sterlite, Tata Motors, PNB and Hindalco were down 3-4.5%.
Reliance Infrastructure and HCL Tech were biggest losers on Nifty, falling over 6%. Reliance Industries, L&T and Bharti Airtel slipped 1-2%.
Beaten down infra major DLF, however, bucked the trend today rising 3% on short covering. Hero Motocorp, Reliance Communications, Jaiprakash Associates and ACC were other gainers.
Meanwhile, mid- and small-caps continued to take huge beating with respective BSE indices falling 2-2.6%.
Market breadth was pathetic; about 6 share slipped in red for every one share in green. Total traded turnover was more than Rs 1.6 lakh crore

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