Sensex comes crashing down below16k

After a brief respite on Wednesday despondency gripped Dalal Street in Mumbai on Friday morning soon after the Indian stock market opened. India’s benchmark index Sensex came crashing down by over 600 points or more than 3.5 per cent and tumbled down below 16, 000 mark. Nifty too slipped below 4,800 mark.

Stocks lost further ground, pulling the Sensex and Nifty below the psychological 16000 and 4800 marks, respectively. A worsening global credit outlook as a result of the US economy inevitably heading for recession triggered the sell-off across the globe, and India is no exception. Shares of real estate, banks and power companies were the worst affected, shedding nearly 6 per cent each.

“The Nifty has resistance at 4955 and support in the band of 4779-4800. If this is breached decisively, fresh weakness will be Seen, which may lead it to test the previous bottom of 4448,” said Asit C Mehta in a note. “Participants with high-risk appetite can adopt derivative strategies in Nifty rather than a naked position. Other investors can adopt a wait and watch approach,” the note added.

Banking and power shares were the worst hit in Friday’s market slide after US and Asian markets tumbled on fears of more credit-related losses in the global financial sector and worries about a recession in the world’s largest economy.

At 11:13 am, Union Bank down 9 per cent was the biggest loser in the banking pack pulling the BSE Bankex down xx per cent. Yes Bank (down 8.68%), Axis Bank (6.92%), ICICI Bank (6.3%) and Centurion Bank of Punjab (5.85%) were also under pressure.

Among power stocks, Reliance Energy down 9.7 per cent took the sharpest knock. Other losers in the sector comprised Areva (8.56%), Torrent Power (8.12%), Reliance Power (6.6%), Crompton Greaves (5.86%) and ABB (4.07%).

Second-line stocks were worse affected, pulling the BSE Mid-cap Index and CNX Mid-cap Index 4.8 per cent and 4.34 per cent down, respectively. Adlabs Films (down 12.22%), India Bulls Real estate (11.52%), Yes Bank (10.41%), India Bulls (9.74%), Nagarjuna Fertlizers Chemicals (9.21%), Max India (9.19%), HDIL (9.08%), Chambal Fertilisers and Chemicals (9.04%), Deccan Aviation (9.03%) and Welspun Gujarat Stahl Rohren (8.7%) were the biggest mid-cap losers.

Trade was suspended between 11:45 am and 12:30 pm due to sun outage. US stocks slumped Thursday after home foreclosures climbed to a record and loan defaults by Thornburg Mortgage and a Carlyle Group bond fund spurred concern that credit losses are deepening. To make matters worse, oil prices rose to a record $106 a barrel increasing concerns surging commodity prices will fuel inflationary pressures in an already slowing global economy.

In the Asia Pacific region, exporters led the declines. The Nikkei 225 lost 3.02 per cent, the Hang Seng dropped 2.85 per cent and the Straits Times was down 1.96 per cent.

The markets have opened on shaky grounds in line with rest of the Asia. Selling is seen in scrips across sectors. Cues from US were very discouraging, US markets dropped to 18mth low. Sensex opened with a gap down of over 400 points and Nifty was down over 100 points. Hong Kong share prices opened 2.8 per cent lower today after Wall Street tumbled overnight amid renewed concerns over credit markets and soaring oil prices in the international market. Crude oil had touched 106 dollars on Thursday.

“The market has entered in a new range where support could be seen around 4600 levels of Nifty and very strong resistance might be around 5050 levels,” Standard Chartered - STCI Capital Market said in a note. Asian markets suffered heavy losses Friday, reacting to a slide on Wall Street, with the declines led by financials such as Mizuho Financial Group in Tokyo and HSBC Holdings in Hong Kong. The Hang Seng shed 2.97, the Straits Times dropped 2.16 per cent and the Nikkei 225 lost 3.04 per cent.

US stocks thudded lower Thursday, falling sharply on more bleak news from the financial sector, including a default at mortgage lender Thornburg Mortgage and news that Merrill Lynch & Co. is opting out of the sub prime mortgage market. The Dow Jones Industrial Average slid 1.75 per cent, the Standard & Poor's 500 Index tumbled 2.2 per cent and the Nasdaq Composite Index fell 2.3 per cent.

About 628 shares have advanced, 2332 shares declined, and 87 shares are unchanged. All the BSE sector indices are in deep red. Bank, capital goods, power and realty stocks are the worst hit, down over 4% each.

Reliance Enegy, Siemens, DLF, ICICI Bank, Satyam, Zee Enetertainment, Maruti Suzuki, were among the top gainers on the indices. Largecap power stocks like Reliance Energy, Tata Power and Suzlon have taken it on their chin.

Asian markets have slip further. Hong Kong's Hang Seng fell 756.19 points, Japan's Nikkei plunged 3.33%, Taiwan's Taiwan Weighted declined 1.23%, Singapore's Straits Times was down 2.28% and South Korea's Seoul Composite tumbled 2.46%.

The Dow plunged 214.60 points, or 1.75%, to 12,040.39 as credit concerns rattled the market and lacklustre retail sales compounded worries about the economy.

The market opened on a negative breath on Friday on tracking declines in stocks overseas on increasing reports of a slowdown in global growth. Banking, power and realty shares led the declines.

Sensex -- 10 biggest falls:

1. Jan 21, 2008 -- 1,408.35 points

2. Mar 3, 2008 -- 900.84 points

3. Jan 22, 2008 -- 875.41 points

4. Feb 11, 2008 -- 833.98 points

5. May 18, 2006 -- 826 points

6. Dec 17, 2007 -- 769.48 points

7. Oct 17, 2007 -- 717.43 points

8. Jan 18, 2007 -- 687.82 points

9. Nov 21, 2007 -- 678.18 points

10. Aug 16, 2007 -- 642.70 points

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