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Sensex Plunges 704 Pts, Re Nears 50-To-A-Dollar Mark

BW Online Bureau Nov 08, 2014

<?xml version="1.0" encoding="UTF-8"?><root available-locales="en_US," default-locale="en_US"><static-content language-id="en_US"><![CDATA[Stock markets turned a sea of red on Thursday, with the BSE Sensex plunging the most in 26 months -- down 704 points to 16,361.15 -- as investors dumped equities globally on US Fed warning on the American economy, triggering fresh fears of worldwide slowdown. All the 13 sectoral indices closed with sharp losses of up to 6 per cent, while all 30 Sensex-scrips closed in red. Investors lost over Rs 2 lakh crore in the meltdown. Besides, fall of the rupee to over 2-year lows against the US dollar -- Rs 49.36 per USD in intra-day trade -- weakest level since July 13, 2009, added to investor worries. A sputtering US economy and headwinds from a European debt crisis could crimp foreign portfolio investments, while a sharp fall in the rupee will accelerate inflation pressures, traders said. Asian and European markets tumbled, following drubbing of the Wall Street as funds pulled out of risky assets on worries over slowing global economy. The selloff picked up pace after European stocks tumbled nearly 4 per cent, with export-driven software services exporters such as Infosys, energy major Reliance Industires and banks among the big losers. "We are mimicking what is happening globally. Our markets will remain weak unless there is some recovery (in Europe)," Sailav Kaji, director of institutional equities at Padmakshi Financial Services, said. Analysts said the US Federal Reserve disappointed investors with its stimulus plan yesterday, while warning of serious downside risks to American growth amid severe euro zone debt crisis. The US indices, Dow Jones and Nasdaq tanked 2.49 per cent and 2.01 per cent respectively, weighing heavily on other global markets today. The Hong Kong's Heng Seng dropped 4.85 per cent, Japan's Nikkei by 2.07 per cent, Indonesia?s index by 8.88 per cent. Markets fell more than 3 per cent in Taiwan, Russia and Poland. The European indices, led by London' FTSE plunged 4.55 per cent, followed by Paris - 4.65 per cent - in early trade. The 30-share BSE index, Sensex, opened 230 points lower and plunged to 16,361.15, a fall of 704.00 points or 4.13 per cent. It had plunged by 869.65 points or 5.83 per cent on July 6, 2009. Shares in Reliance Industries, which has the maximum weight on the main index, fell 6.1 percent in their biggest one-day fall since June 2009, after media reports the oil ministry may lower the company's cost recovery at its key gas blocks off India's east coast. A company spokesman declined to comment when contacted by Reuters. Earlier this month, India's federal auditor had criticised the energy major and the government over development of natural gas field in the Krishna Godavari basin and called for revamping profit sharing arrangements from oil and gas blocks. Software services bellwether Infosys shed 3.4 percent and bigger rival Tata Consultancy Services dropped 4.7 percent. State Bank of India, the country's largest lender, lost 3.6 percent and rival ICICI Bank fell 4.3 percent. Other big losers included realty major DLF, which fell 7.2 percent, while infrastructure firm Jaiprakash Associates tumbled 9.3 percent on growth concerns. Similarly, the broad-based NSE index Nifty plunged 209.60 points, or 4.08 per cent to close below 5K mark at 4,923.65. The 50-share NSE index closed down 4.08 percent at 4,923.65 points. There were 10 losers for every gainer in the broader section on heavy volume of 625.4 million shares. World Stocks Tumble World stocks as measured by MSCI fell more than 2.4 percent to a new year low, making for a 14 per cent year-to-date loss. The more volatile emerging markets stock index was down nearly 5 percent for a 22 percent 2011 loss. The stocks slide sent the rupee skidding to its weakest in more than 26 months and triggered concerns about more pressure on inflation that has been running at more than 9 percent for months. "We are net importers of crude and rupee-fall will bring in imported-inflation as all our crude imports are in dollar terms," Kaji said. The Reserve Bank of India had raised rates last week for the 12th time in 18 months and warned fighting stubbornly high inflation remained its priority even as economic growth was slowing. Stocks That Moved * Astral Poly Technik rose as much as 20 percent after the company said it was in preliminary talks with U.S. based Lubrizol Corp to set up a chlorinated poly vinyl chloride making plant. * Videocon Industries closed down 1 percent after initially rallying 3 percent following an oil and gas discovery in Brazil announced by the energy unit of the consumer electronics maker. Top 3 By Volume * KS Oil on 36.77 million shares * Unitech on 29.42 million shares (Agencies)