The Hindu Business Line : Sensex sheds 700 points on economic worries

The negatives
China’s massive $586-billion stimulus package provided only temporary respite
15 per cent dip in October exports dampened sentiments

Our Bureau

Mumbai, Nov. 11 Heavy profit booking after a two-day gain of more than 800 points hammered the benchmark index – the Sensex—down by almost 700 points on Tuesday.

Indian stocks also tracked the global markets which could not sustain their gains of Monday; China’s massive $586-billion stimulus package of Monday appeared to have brought only temporary respite, said brokers.

India’s 15 per cent decline in exports in October – the highest decline in several years – also dampened investor sentiment, sparking off more selling, they said.

The markets have been jittery for some time now and so even a marginal trigger in the form of some negative news sends the markets downwards, said a head of research of a broking firm.

The FIIs were net sellers to the tune of Rs 370 crore, while domestic institutions were net buyers by Rs 229 crore.

According to some marketmen, news reports that there could be a delay in the commissioning schedules of two key oil and gas projects of Reliance Industries also added to the negative sentiment.

While the Sensex fell by 6.61 per cent to end below the psychological 10000-mark, at 9839.69, the broader Nifty fell by 6.66 per cent to end at 2938.65.

India’s export figures for October and apprehension of a prolonged slow down in global economic activity were the major reasons for the slide. Further, our market took selling cues from the negatively trading European and US index futures, said Mr Alex Matthew, Head of Research at Geojit Financial Services.

The Dow shed about 70 points overnight, while the Hang Seng was down by 4.77 per cent and Nikkei by three per cent Tuesday. The key benchmark indices in UK , Germany and France were down between 1.72 per cent and 2.51 per cent.

All the Indian sectoral indices were in red today with BSE-Realty falling 10.25 per cent and BSE-Metal 8.42 per cent. The index losers included Jaiprakash Associates which fell 12 per cent, Sterlite Industries 11 per cent, Tata Steel 11 per cent, Hindalco and DLF 10 per cent each. ITC was the sole Sensex gainer, rising marginally.