Midsession: Sensex dips by 226 pts on slowest GDP in over 5 yrs

Midsession: Sensex dips by 226 pts on slowest GDP in over 5 yrs
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First Published: Fri, Feb 27 2009. 02 25 PM IST
Updated: Fri, Feb 27 2009. 02 25 PM IST
Mumbai: The Bombay Stock Exchange benchmark Sensex on Friday tumbled by 226 points at midsession as market players off-loaded part of their holdings following reports of the steepest quarterly fall in economic growth in over five years.
The 30-share Sensex, which gained in the last two trading sessions, dropped by 226.20 points at 8,728.66 at 2:15pm on reports that the economy has registered a growth rate of 5.3% in October-December period of this fiscal as agriculture and manufacturing sector contracted.
The wide-based National Stock Exchange index Nifty too lost 77.20 points at 2,708.45 at the same time.
As the selling pressure spread over a wide-front, all the sectoral indices led by realty and information technologies recorded heavy losses.
Shares had dropped more than 2% around noon as weak growth data indicated the global financial crisis could have a greater impact on the domestic economy than expected.
India’s economy grew 5.3% in the December quarter from a year earlier, slowing sharply from the previous quarter’s 7.6% as the global economic crisis slashed demand and exports.
“The data will definitely hurt the confidence in the market,” said K K Mital, chief executive at Escorts Mutual Fund. “We are seeing volatility because local buyers are staying away and foreign funds continue to sell selectively.”
Tata Motors bucked the trend after the vehicle maker said its Nano, slated to be the world’s cheapest car at under $2,000, would go on sale in April. Banks largely fell on worries about lower treasury gains from bonds trading that have underpinned their earnings in recent quarters.
Traders said a possible rate cut to revive growth would also put pressure on bank margins in the near term because their main source of funds were term deposits tied to higher costs.
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First Published: Fri, Feb 27 2009. 02 25 PM IST
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