Market crash pulls 350 stocks to their all-time lows
Falling with a noisy thud, the 11 per cent crash in the value of the Sensex, the second-largest in its 18-year history, maybe painful.business Updated: Oct 24, 2008 21:23 IST
Falling with a noisy thud, the 11 per cent crash in the value of the Sensex, the second-largest in its 18-year history, maybe painful. But it doesn’t look like the end, as all analyses — fundamental or technical — went unheard, as the market looked at cues outside India. Key among them: the threat of a global recession.
The market reached its lowest level since November 23, 2005 as foreign institutional investors (FIIs) continued their selling spree. And against their combined might of Rs 1,431 crore worth of sales, domestic institutional investors that that bought Rs 514 crore worth of equities, could not stem the fall.
The Sensex fell 1,071 points to close at 8,701 points.
The markets opened under the weight of negative growth outlooks from Sony and Toyota in Japan, sending recessionary signals. Many other American, European and Japanese major companies have lowered their future outlooks. As a result, FIIs sold.
Midway through trading, came fears of a recession in the UK, with a GDP contraction of 0.5 percentage point, the first time since 1992. Further selling followed, across the world. And India was no exception.
All Asian and European markets opened under selling pressure and closed in the red. Most of them closed with a fall of around 10 per cent. Japan was down 9.6 per cent, South Korea fell 10.6 per cent and Hong Kong closed 8.3 per cent lower. All major European markets closed with a fall of around 8 per cent.
As if these were not enough, the last hit came from the US futures market that opened in negative and hit lower circuits — a point where trading gets automatically suspended. Experts and commentators are calling this fall a Black Friday.
This impacted Indian speculators. “A weak opening of the US futures market resulted in the last hour fall as no one wanted to keep the position open over the weekend,” said Amitabh Chakraborty, president (equity), Religare Enterprises.