The Hindu Business Line : Sensex dips below 16,000-mark

Mumbai, March 7 Gloom prevailed over the Indian bourses, as weak local sentiment coupled with global uncertainty drove the benchmark Sensex to its lowest in six months.

The Sensex slipped below the 16K mark on Friday, as relentless selling across counters dealt a severe blow to several blue chips.

More than 100 out of the BSE-500 stocks fell by over 50 per cent, while another 200 stocks fell between 30-50 per cent on the BSE from their peak levels..

The BSE Sensex fell 3.42 per cent and closed at 15975.52 after shedding 566.56 points from its previous day’s close of 16542.08. The broad-based S&P CNX Nifty dipped 3.04 per cent to close at 4771.60.

“Global economies are heading for a recession and that is impacting the Indian markets,” said Mr Rajnish Rangari, Country Head, Investment Banking- CMG, Karvy Investor Services Ltd.

“There was some redemption pressure on US hedge funds and simultaneously there is lack of buying interest in the market which is pushing the markets downwards,” said Ms Anita Gandhi, Head of Institutional Business, Arihant Capital Markets Ltd.

Credit worries

Hang Seng was down 3.6 per cent and Nikkei fell 3.27 per cent as the Wall Street tumbled on Thursday due to concerns over credit markets and rising prices in the international market.

Crude oil touched a high of $105.40 on Thursday.

Adding to the worries in the global financial markets, Thornburg Mortgage Inc, a mortgage lender and a Dutch-listed affiliate of private equity firm Carlyle Group, revealed problems with investments linked to US sub-prime mortgages.

Sectoral fall

Amongst the sectoral indices, BSE-Realty, BSE-Power and BSE-Bankex led the fall, sinking 6.64 per cent, 5.57 per cent and 4.92 per cent respectively.

Bank stocks witnessed continued selling on the back of the suggestion made by the Finance Minister, Mr P. Chidambaram, to cut home-loan lending rates for a second time in two months.

Stocks which were the biggest losers include Reliance Energy, which fell 12.98 per cent, Bajaj Auto 11.23 per cent, ICICI Bank 7.04 per cent, L&T 6.64 per cent and Hindalco by 5.79 per cent.

Other stocks which lost substantially include M&M (4.52 per cent), HDFC Bank (3.75 per cent), Tata Motors (4.40 per cent), Wipro (3.64 per cent), DLF (3.47 per cent) and TCS (3.20 per cent).

The market breadth was negative with 2,384 stocks declining on the BSE, while only 295 advanced.

FII were net buyers to the tune of Rs 513.04 crore, while domestic institutions were net sellers by Rs 66.79 crore.

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