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Sensex slumps 386 pts on aggravating US recession fears

Sensex slumps 386 pts on aggravating US recession fears
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First Published: Fri, Feb 22 2008. 05 11 PM IST
Updated: Fri, Feb 22 2008. 05 11 PM IST
Mumbai: The stock markets lost luster after overnight brief rally and the benchmark Sensex slumped by over 380 points on selling pressure, triggered by aggravating fears of recession in US, the world’s largest economy.
The Bombay Stock Exchange 30-issue barometer resumed sharply lower at 17,515.62 points and remained in negative terrain throughout the day and touched a low of 17,294.73 points.
The key index finally closed on Friday at 17,349.07 points, a steep fall of 385.61 points, or 2.17%, from its previous close of 17,734.68 points.
Similarly, the broader S&P CNX Nifty of the National Stock Exchange also declined by 81.05 points, or 1.56%, to 5,110.75.
The Dow Jones Industrial Average and the Nasdaq Composite Index yesterday dipped by 143 and 27 points respectively after announcement of a weak US mid-Atlantic manufacturing data, the lowest level since the 2001 recession.
As a result, the spill-over effect was seen in Asian markets today. Barring Taiwan, most of the other indices in the region ended with losses by an average of 0.2% to 3.5%.
Marketmen said covering long positions ahead of the expiry of February contract on coming Thursday also weighed on the market sentiment.
Banking, IT and refinery counters suffered a sharp setback on heavy selling and ended with sharp losses.
Retail investors preferred to sit on the fence or booked profits to play safe in the prevailing uncertain scenario as they remained clueless about market’s future direction.
Mumbai: The Bombay Stock Exchange benchmark Sensex tumbled at mid-session Friday as shares, mainly in the banking sector, fell on concern that recent cuts in interest rate might have a negative impact on earnings of banks.
The Sensex, which had opened lower by 219 points, fell further to record a fall of 375.66 points to 17,359.02 as banking heavyweights like State Bank of India, ICICI Bank and HDFC declined sharply.
The banking index was the second-biggest loser among 18 sectoral indices on the BSE. The index fell 2.1% at 10,209.67.
Major PSU banks like SBI, Canara Bank and Bank of India have cut lending rates in the past few days.
Wide-based National Stock Exchange’s Nifty dropped by 91.50 points to 5,100.30 at 1300 hours.
Besides banking stocks, other leading scrips like Bajaj Auto, Reliance Industries, Tata Steel, Larsen and Toubro, Tata Consultancy Services and Ingfosys Technologeis fell sharply.
The market also remained under pressure as major Asian indices traded lower on renewed fear of the US entering into a recession.
Among the factors back home, inflation rate rising to 4.35% for the week ended February 9 might also have affected the investors’ sentiment. Inflation stood at 4.07 % in the previous week.
Opening bell
The Bombay Stock Exchange benchmark Sensex Friday opened 219 points down on heavy selling, sparked by weak global cues.
The 30-share index, which had gained 117 points in previous day’s trading, lost 219.06 points to 17,515.62 points as most of heavy-weights stocks, led by banking shares, fell.
Wide-based Nifty of the National Stock Exchange also opened lower by 8.40 points to 5,183.40.
Stock brokers said meltdown in the global stock markets triggered panic selling by funds here. Dow Jones closed the previous session 1.15% down.
They said, Hong Kong market opened 1.65% lower today after Wall Street’s decline overnight on renewed concerns about the US economic outlook following a weak manufacturing report.
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First Published: Fri, Feb 22 2008. 05 11 PM IST