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Indian equities crash to
three-year low on Diwali-eve, recover
Indo-Asian
News Service
Mumbai,
Oct 27 (IANS) A key Indian equities index fell below the 8,000-point
mark in intra-day trading to its lowest since November 2005
as the bear hug continued on the eve of Diwali Monday on the
back of overall panic and weak global cues.
The
sensitive index (Sensex) of the Bombay Stock Exchange (BSE)
opened lower at 8,599.58 points and moved up to 8,739.48 points,
some 15 minutes into trading. But nervousness set in soon
after, and pulled the index down to 7,985.07 points 45 minutes
post noon - the lowest point in three years.
At
that level, the 30-share bellwether index was ruling at a
loss of 715.64 points, or 8.22 percent.
Since
then, the Sensex started recovering, to close at 8,509 points
- a fall of 191.51 points or 2.2 percent.
The
BSE mid-cap index, which opened at 3,081.72 points, closed
at 2,966.23 points, a 4.18 percent dip.
The
BSE small cap fell 182.99 points to 3,478.84 points, reflecting
a fall of 5 percent.
At the National Stock Exchange (NSE), the broader-based 50-share
S&P CNX Nifty closed Monday at 2,524.2 points, a loss
of 2.31 percent.
Despite
investor nervousness, Religare Securities president Amitabh
Chakraborty was optimistic. “Right now the earnings of the
Indian companies are good. The Indian equities market knows
that the Indian economy will grow at 7 percent and the inflation
would be lower next year," he said.
Chakraborty
said the market would stabilise once the American economic
numbers are known. “That will show whether there is to be
a recession in the US. Once that is known, the market will
factor those numbers and look forward.”
Added
Apoorva Shah, head research (institutional equities), Prabhudas
Lilladher: "It has been a continuation of what has been
happening during the past few days."
"The
Europeon market opened weak but recovered a bit. FIIs are
selling in India and it is the time to buy stocks of companies
involved in infrastructure, IT and banks."
Like
him, Chetan Sehgal, a Delhi-based 21-year college student
and part-time investor, believes the crash opens up an opportunity.
“It's better to invest in the market now, when stock prices
are low. In January, the Sensex was ruling at 21,000 points,
now it is 8,000.”
Last week, large-scale selling by foreign institutional investors
belied expectations of investors.
On
top of that, the central bank, the Reserve Bank of India (RBI),
kept all key rates unchanged in its mid-term policy review
Oct 24. Plus, poor global cues played havoc with Indian markets.
Indo-Asian
News Service
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