Sensex falls below 10000 for the first time in two years

The key benchmark indices tumbled in late trade with the Sensex falling below 10,000 mark for the first time in more than two years. The Sensex provisionally lost wn 667.02 points or 6.03%, on global recession worries. Trading in US index futures suggested the Dow would fall 257 points at the opening bell. The market declined sharply in late trade after witnessing bout of volatility earlier in the day. An initial surge boosted by reports government was considering several measures to raise domestic institutional participation in the equities, proved short-lived. Realty and banking stocks tumbled. Index heavyweight Reliance Industries (RIL) dipped more than 7.5%. Reliance Infrastructure was down more than 13.5%, Sterlite Industries was down more than 12% and Jaiprakash Associates slumped nearly 12%. NTPC and DLF lost almost 10% eachl. Though in the red, the BSE Mid-Cap and Small-cap indices outperformed the Sensex. The government has reportedly sought data from the Reserve Bank of India to consider a proposal to enhance the investment limit for bank exposure to equity markets. This will be part of several measures to boost domestic institutional participation in the markets at a time when foreign institutional investors (FIIs) are exiting. At present, a bank can invest up to 20% of net worth in a single company and up to 40% of net worth in a group. The domestic markets have declined sharply in the past few days despite Reserve Bank of India’ several attempts to infuse liquidity in at a time when global recession worries have marred investor sentiment. Asian markets were mostly lower as worries about a slowing global economy kept investors on the sidelines. As per the provisional figures, the BSE 30-share Sensex slumped 667.02 points or 6.03% to 9,914.47. The index dipped 670.17 points at the day's low of 9,911.32 in late trade, its lowest level since 24 July 2006. The Sensex rose 205.44 points at day’s high of 10,786.93, at the onset of the trading session. The S&P CNX Nifty was down 132.05 points or 6.58% to 3,054.25 as per the provisional figures. It hit a low of 3,046.60 in late trade, its lowest level since 25 July 2006. The BSE clocked a turnover of Rs 4,121 crore today as compared to a turnover of Rs 4,552 41 crore on 16 October 2008. The BSE Mid-Cap index was down 3.24% at 3,583.53 and The BSE Small-Cap index was down 2.88% at 4,162.86. Both the indices outperformed the Sensex.. The market breadth was weak. On BSE, 742 shares advanced as compared to 1,853 that declined. 54 shares remained unchanged. India’s largest private sector company by market capitalization and oil refiner Reliance Industries fell 7.66% to Rs 1,290.25 off day’s high of Rs 1,438. The Bombay High Court on Thursday, 16 October 2008, questioned the government about its locus standi in the legal tussle between Reliance Industries and Reliance Natural Resources over supply of gas from the former’s Krishna Godavari basin to the latter’s proposed power plant at Dadri in Uttar Pradesh. This came after the government sought to be a party to the case. The government counsel will present his case on Friday, 17October 2008. Reliance Infrastructure (down 13.71% to Rs 481), Sterlite Industries (down 12.26% to Rs 262), Jaiprakash Associates (down 11.97% to Rs 65.80), NTPC (down 9.68% to Rs 149.75) were the major losers from the Sensex pack. Realty stocks slumped despite possibility of home loan rate cuts by lenders due to fall in inflation and cut in the cash reserve ratio cut by Reserve Bank of India three times in last ten days. BSE Realty index fell 12.06% and was the major loser from the sectoral indices on BSE. All the stocks from the index were in red. Realty majors, Indiabulls Real Estate, DLF and Unitech fell between 10.34% to 14.16%. Fall in lending rates may spur demand for residential properties. Major lenders slumped despite India’s second largest private sector bank by net profit, HDFC Bank’s robust Q2 results. HDFC Bank fell 5.82% even as it reported 43.2% rise in net profit to Rs 527.98 crore on 62.8% growth in total income to Rs 4,634.32 crore in Q2 September 2008 over Q2 September 2007. The stock had fallen 4.15% yesterday, 16 October 2008, ahead of the results which hit the market after trading hours. ICICI Bank and State Bank of India fell between 5.61% to 8.42%. India’s largest home loan lender by sales HDFC fell 1.37% even as it reported 32.5% growth in net profit to Rs 534 crore in Q2 September 2008 over Q2 September 2007. The results hit the market during trading hours. India’s largest steel maker by sales Tata Steel fell 7.99% after its UK unit Corus decided to cut crude steel production by up to 20% or 1 million tonnes over the next three months due to slowing demand caused by the global financial crises. There would be no material change in production for its operations outside Europe, Tata Steel said.. India's third largest IT services provider by sales Satyam Computer Services fell 2.6% to Rs 265.95. The stock had held firm for a better part of the trading sessions after the company raised its earnings per share forecast in rupee terms for year ending March 2009 at the time of announcing Q2 September 2008 results today. Pritish Nandy Communications gained 1.32% on BSE, on increase in promoters' stake in the company. European markets which opened after Indian markets were positive. France’s CAC 40, Germany’s DAX and UK’s FTSE 100 rose between 0.46% to 1.16%. Asian markets were mostly lower. South Korea's Seoul Composite, Singapore’s Straits Times, and Taiwan's Taiwan Weighted, Hong Kong's Hang Seng, fell between 1.52% to 2.73%. China's Shanghai Composite index and Japan's Nikkei, rose between 1.08% to 2.78%. US markets staged a comeback in a late-day rally in highly volatile trade on Thursday, 16 October 2008, as investors snapped up beaten-down shares a day after Wall Street's worst day since the 1987 crash. The Dow Industrials surged 401.35 points, or 4.68%, to 8,979.26. The S&P 500 index advanced 38.59 points, or 4.25%, to 946.43, and the Nasdaq composite index added 89.38 points, or 5.49%, to 1,717.71.