Mumbai: Inflation racing past the crucial 5%, lingering fears of recession catching up with US, and Left parties’ fresh threat to the UPA government-- all these factors put together offered a perfect recipe today for Sensex to come crashing down and end below 16k level.
In a day marked by heavy losses, The 30-share benchmark Sensex on the Bombay Stock Exchange settled the day at 15,975.52, a net fall of 566.56 points, or 3.42%, from its previous close.
The Asian indices also fell in the range of 1.26% to 3.6%. The BSE barometer is closing below this level for the first time since 18 September last year.
Realty, power and banking shares took a battering, leading to the steep fall in Sensex. Blue-chips Hidaclo, L&T, ICICI Bank, Bajaj Auto and Reliance Energy posted significant losses in the range of 6-13%.
Marketmen said investor sentiment was hit after the wholesale price based inflation for the week ended 23 February crossed the Reserve Bank’s tolerance level of 5% for the first time in 10 months.
The sentiment was also dampened by persistent weakness in global markets, some of which even tested their recent lows, they added.
Asian indices fell by about 1.26% to 3.6% after American stocks yesterday tumbled as fears of recession and credit crisis continued to haunt the Wall Street.
Market analysts said amidst all such negative cues for the bourses, Left parties setting a deadline for UPA government to decide on N-deal with US appeared as if rubbing salt into wounds.
Marketmen said investors resorted to across-the-board sell-off in the absence of any positive trigger for the market as well as a slowdown in FII activity so far in the year.
The broader S&P CNX Nifty of the National Stock Exchange tumbled by 149.80 points or 3.04% from its last close of 4,921.40.
Reliance Energy topped losers with its shares trading 12.98% lower, followed by Bajaj Auto 11.23%, L&T 6.64%, HDFC Bank 3.75%, HDFC 4.57%, Grasim 2.76% and market leader Reliance Industries 1.92%.
Both the key indices have crossed the crucial 50 week moving averages and the Nifty has fallen below 4,803, a strong indication of a bear phase for the markets, analysts said.
They said the markets are unlikely to come out of this phase unless the global sentiment is improved and Foreign Institutional Investors made fund allocations for the year.
The Sensex has broken the 16,175-support and could get support at 15,700, they added.
The mid-cap and the small-cap indices plunged by 309.79 points or 4.35% and 400.61 points or 4.55% to 6,804.39 and 8,409.18 respectively.
The market breadth was extremely negative as 2,384 shares registered losses against 295 gainers on the BSE.
The trading volume spurted to Rs6,272.94 crore from Rs5,363.43 crore on Wednesday. GSS America clocked the highest turnover of Rs657.73 crore followed by RIL (Rs286.84 crore), RNRL (Rs239.28 crore), Reliance Comm (Rs230.46 crore) and REL (Rs229.38 crore).
The broad-based BSE-100 index tumbled by 326.03 points or 3.72% to 8,448.68 from previous close of 8,774.71.
The BSE-200 index and the Dollex-200 were quoted lower at 1,988.14 and 815.78 at close compared to last close of 2,066.52 and 852.63 respectively.