Fed hope high on 'Halal' Street
Interest rate cut by the US Federal Reserve should help Indian stocks recover soon, reports MC Vaijayanthi. Stock shock on Fridaybusiness Updated: Aug 18, 2007 04:13 IST
The Sensex crashed again on Friday amid overnight global jitters, but the weekend should not be sleepless for investors as the US Federal Reserve made a surprise interest rate cut, moving to discipline an unruly market. That should help Indian stocks recover next week.
Asian markets were rattled but European markets were open to catch the positive news that sent the Dow Jones stocks index up 200 points on Wall Street.
The 0.5 percentage point cut in the rate at which the Fed lends to US banks was a strong signal that regulators would help quell a global market turmoil in which shaky “sub-prime” home loans packaged as high-risk, high-interest bonds have been lapped up by greedy funds who have since burnt their fingers.
At home, among the 30 Sensex stocks, five stayed in green, while the rest continued to roll in the red. Gains in heavyweight Reliance Industries and HDFC helped the Sensex bounce back from the day’s low of 13,799 points to close at 14,141, down 217 points, or 1.5 per cent. The index has lost nearly 5 per cent of its value this week.
Foreign institutional investors effected net sales of Rs 2,849 crore worth of securities on Thursday.