Sensex slides 541 pts on global jitters
Indian markets followed global cues, fell sharply and traders were left with no option but to cut their positions and minimise losses on a day the Sensex met with its third largest fall in absolute terms. Credit default fears in the US home loan market sent jitters across global markets and the sweep did not spare the Sensex and the Nifty.
Speculators were out to cut their positions to prevent paying further margins on their outstanding trading positions and among foreign institutional investors hedge funds were seen selling, said stockbrokers.
The Sensex opened 400 points lower and no recovery was in sight as it further receded to end 541.74 points lower at 15,234.57. In percentage terms the broader Nifty's fall was steeper at 3.85 per cent against the Sensex fall of 3.46 per cent. "The correction was good, though it was a little overdone. At the time our markets closed in the red European markets moved to green territory which gives us some hope," said MAA Annamalai of Akshaya & Co.
"Corrections give opportunities for markets to consolidate. If the investor has the risk appetite he should stay invested,"
said A Balasubramanian, chief investment officer, Birla Sun Life Mutual Fund. "If one were ask if the Indian economy and corporate performance justify investments in equity and mutual funds, the answer is yes," he said.
The downtrend was across the board, but far shaper in the heavyweight large-caps that were in a tearing hurry to take the Sensex on a quick journey from 15,000 to 16,000. Tata Steel, BHEL, Larsen & Toubro, ONGC, HDFC and Hindalco were the top losers. The Bombay Stock Exchange PSU and the Realty indices were worst hit among the sectors. "There is nervousness when you are at a high and the closing was pretty bad. From a trading perspective, one can only sit on the sidelines and watch," said Nihar Oza, vice-president, Brics Securities. No quick calls on whether the correction would be deeper were available as traders want to wait for a few more sessions.
It would be healthy if the correction is sustained for a few sessions, unlike the short-lived intra-day corrections the market has been going through in the recent past, said analysts. "If the US markets are even mildly positive today, Monday could see a reversal of 100-150 points," said Arun Kejriwal of Kris Research. Brokerages are advising their clients to be cautious but not one is pressing the panic button.