Friday, January 22, 2010

Share market freezes again Sensex Down

Banking and Monitory regulation tightening in US and China has caused global panic in the share market. The markets all over has reacted sharply to the news.
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Nifty slipped below 5,000 as the market opened today in morning. The selling pressure which had started based on statements on banking and economy from the China and US. In the early hours the sensex lost 344 points and Nifty 105 Points. The China may further tighten its monetary policy after the double-digit growth in the last quarter. President Obama proposed new limits on the size and trading practices of big banks.

All 30 Sensex counters closed in reds on Thursday. Overall market breadth being extremely negative with 2,357 declines against only 557 gainers on the BSE. The volumes were high at Rs6,354.78 crore from Rs6,185.95 crore from previous day signifying rush to offload the stocks as early as possible.

FIIs are booking profit to pull out money from market ahead of the budget and may reinvest in upcoming mega follow-on-public offer (FPO) by the largest power generation firm, NTPC, which opens on February 3. Another factor is of the strengthening dollar and euro which acted as a dampener on the already weak sentiment.

Analysts said China, after its stupendous 10.7% GDP growth in the fourth quarter, will have to cool down its overheated economy through monetary and fiscal policy measures. This led to FIIs resorting to panic selling. Selling was across-the-board as all sectoral indices ended in the red between 5.15% and 1.42%.

Poor results of engineering giant L&T added to the negative sentiments.L&T is the top loser among the Sensex stocks, having shed 4.2% at Rs 1460. The engineering giant had lost 6% on Thursday. ONGC also disappointed market with its numbers and lost 2% of its value

Suzlon, JP Associates, Tata Power, ABB, Siemens, DLF, IDFC, ICICI Bank, Reliance Power, Tata Motors, SAIL, Jindal Steel and Hindalco were the other losers. The shares of FACT, NMDC, ITI and STC India fell 5% each. They had become favourite on the ce of dis-investment news.

The US markets earlier witnessed biggest second-day drop since June reacting to the statement of the President on increased bank regulation in US & tighter monetary policy in China. The Dow Jones lost 213 points or 2% at 10,390. The NASDAQ was down 25.5 points or 1.12% at 2,265 and the S&P 500 was down 21.5 points or 1.9% at 1,117.

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