Markets bleed ahead of Diwali, sheds 1,071 pts

Markets bleed ahead of Diwali, sheds 1,071 pts

Mumbai: The stock market bled heavily as investors on Friday hammered banking, realty and oil and gas stocks, pushing the benchmark Sensex down by about 1,100 points to 8,701.07 points.

The markets which opened weak had a free fall soon after the Reserve Bank unveiled its mid-term review of the annual credit policy, without any changes in key policy rates.

The 1,071-points plunge in Sensex on Friday has been the steepest ever in any single trading session and has pushed the index to its lowest in about three years despite the continuing pep talk from Finance Minister P Chidambaram and host of measures by RBI to prop up the markets.

Realty sector stocks suffered the worst, with the group as a whole shaving off nearly a quarter of its wealth, followed by oil and gas, banks and metal stocks.

With all the blue chips ending in red, realty giant Unitech suffered erosion of more than half of its market capitalisation with its shares plunging by Rs31.75 to settle at Rs61.80.

According to BSE data, there was only one gainer in A-group shares and that too a public sector entity - Container Corporation that recorded a meagre 45 paise increase to close at Rs706.55.

The downhill journey caused by investor skepticism was rushed further by the global meltdown and more so by the plunge witnessed in east Asian bourses this morning. Over 350 companies plunged to their lowest levels.

The key index touched the day’s low of 8,556.82 as funds remained aggressive sellers influenced by a weakening global trend.

Similarly, the wide-based National Stock Exchange index Nifty also broke the crucial 2600 points level by ending at 2584.00, showing a hefty loss of 359.15. It touched the day’s low of 2525.05 points.

The lowering of economic growth projection by RBI to 7.5-8 per cent also eroded investors confidence. Finance Minister P Chidambaram, who has been advising stock market investors to take informed decision and not to resort to panic sales, said that RBI’s decision not to disturb rates was in line with expectations.

RBI would add more liquidity as and when needed, he said.