Sensex crashes 431 points; don’t panic, say experts
Investors lost Rs. 1 lakh crore on Monday as a combination of profit booking, panic selling and weak global cues battered Indian stocks. The Sensex crashed 430.65 points and fell below the psychological 20,000 level to close at 19,691.67. HT reports.business Updated: May 14, 2013 01:45 IST
Investors lost Rs 1 lakh crore on Monday as a combination of profit booking, panic selling and weak global cues battered Indian stocks. The benchmark BSE Sensex crashed 430.65 points, or 2.14%, and fell below the psychological 20,000 level to close at 19,691.67.
Experts, however, urged investors to hold their nerves. Analysts expect the Sensex to say in the 19,000-20,000 range over the next few months.
“The markets had gone up substantially over the past few weeks and some correction was expected," said Dipen Shah, head of private client group research, Kotak Securities, an investment advisory firm. "Then the fall in the rupee (to almost R55 per dollar), worse-than-expected April trade data and weak Asian/European markets soured sentiments.”
India’s April trade deficit rose to $17.7 billion (R97,350 crore) in April, on the back of a massive surge in gold imports. This raised concerns that the current account deficit, the difference between inflows and outflows of foreign currency, could balloon out of control and derail any hopes of an economic rebound this year. The spooked market ignored encouraging data showing a fall in retail inflation to 9.4%.
The Sensex, which had reached a 28-month high on Saturday, recorded its biggest fall in 14 months. All 30 stocks lost ground in the all-round selling. ITC was the biggest loser, falling 5.3%.
The broader 50-stock National Stock Exchange Nifty declined 2.08% to 5,980.45. During the day, 1,542 stocks declined while only 808 recorded gains on the BSE.
“There wasn't any fundamental reason for the markets to rise as it did over the past few weeks. Neither is there is any fundamental reason for the crash,” said Deven Choksey, MD, KR Choksey Securities, a leading broking firm.
First Published: May 13, 2013 09:40 IST