Howrah News Service -  Latest news and headlines on Howrah,West Bengal and World: Sensex slips on high oil

Sensex slips on high oil
================================================================================
newsbyte on 09 June, 2008 04:24:28
 
By Our Special Correspondent
Mumbai
June 9: Deeply negative cues from the US markets, weak cue from the Asian
markets, crude at $137 a barrel and fires of inflation saw the Sensex plunge
below the 15,000-mark.
The Sensex closed 506 points down at 15,066. The National Stock Exchange’s
50-share Nifty cracked its January 22 low of 4,448 in intra-day trade and sank
to 4,411 but recovered on short covering to close 126 points down at 4,501.
Asian markets, which depend on the US for their exports were all in the red
with the Nikkei losing 308 points and Taiwan and Straits Times 157 and 62
respectively. The Indian markets however, fared the worst. They were down by 2.7
per cent (Nifty) and 3.25 per cent (Sensex).
Mr Bhavesh Shah, vice-president (research), Asit C. Mehta, said, "It’s
natural for the Indian markets to fall harder than the others because it went up
much faster. Basically there’s a negative sentiment in the markets."
Mr Amitabh Chakraborty president (equity), Religare Securities, said, "This
fall was expected considering the economic factors. FIIs were the reason behind
India’s growth story and now with growth slowing down they are selling." In
five days, they have sold $850 million.
Mr Chakraborty said liquidity is flowing to the commodity producing countries
such as Brazil and Russia from the consuming countries.
Mr Ranjit Kapadia agrees that the exit of FIIs is one of the major factors
pulling down the market.
They have bought just 10 per cent of what they had sold. They are selling
because of financial weakness in the global markets, he said. He expects the
sentiment to remain weak as there is no dramatic change coming on the horizon
and there is selling pressure from the FIIs.
High oil prices and higher subsidies by the Centre has impaired the country’s
economy and government’s deficit is showing a bigger hole, says Mr Deven
Choksey, managing director, K.R.Choksey. The government will not have funds for
infrastructure development and this will have an impact on future earnings of
the corporates. This will be seen after the next quarter, he said.
Real estate stocks were the worst-hit led by Unitech and DLF which crashed 10
per cent and seven per cent respectively. DLF which was down Rs 38 is now
quoting at Rs 481 way below its issue price of Rs 525. Oil stocks continued to
reel under the pressure of rising prices. Even OBGC was down RS 65 while
Reliance lost Rs 76.