The Indian benchmark indices fell by close to two per cent in Thursday's trading session. They were flat for the better half of the day, but with the opening of the European markets they lost steam and took a steep dive.

The European markets opened positive but turned red after the European Central Bank stepped in to buy the Spanish bonds. The Spanish bond auction did not go as desired, said reports, leading to heavy declines in the European markets.

The BSE Sensex was down by 314.16 points, or 1.87 per cent, to 16461.71. The NSE Nifty fell by 95.70 points, or 1.9 per cent to end the day below 5,000 at 4934.75.

The fall was led by Reliance Industries, which has the highest weightage in the Sensex. The scrip fell by 4.5 per cent to Rs 810.65 a share. The stock had been falling since the start of the trading session. Among the Sensex stocks, Jaiprakash Associates was down the most — by 6.5 per cent — and closed at Rs 62.70 a share. “There was specific selling by FIIs and large investors. Internationally, there is fear in Europe about whether the French and the Italian markets will able to pass through the turmoil. Domestically, the corporate results have not been good, particularly those announced in the first half of November. So, over a period of time, investors have become wary,” said Mr Sunil Jain, Nirmal Bang Securities.

FIIs, on Thursday, were net sellers for Rs 195.20 crore, while DIIs were net buyers at Rs 371.59 crore on both the exchanges. Retail on the BSE were net buyers at Rs 55.75 crore. “Though there were some opportunities for intra-day trading, we were extremely wary. It is a difficult period for the small investor,” said Mr Ashish Choudhary, a retail investor. The rupee dropped lower today to close at Rs 50.90 per dollar. The Nymex Crude Future was down by 1.38 per cent to $101.17/barrel. Gold was down by 1.3 per cent to $1750.80/ounce.

Market experts worry that the sentiment will continue to remain less than buoyant as the news is negative everywhere. “Some stocks are at an all-time high, while some are at an all-time low. There is no clear divide in the market,” said Mr Raamdeo Agrawal, Joint Managing Director, Motilal Oswal Financial Services. “The rupee is depreciating, there is liquidity tightness in the system, IIP numbers continue to fall, the cost of living is rising, fiscal deficit is out-of-control and inflationary pressure refuses to relent. Where do we hide?” he asked.

Related Topics
comment COMMENT NOW