Sensex plunges below 10,000
It took 484 trading sessions for the Sensex to climb from 10000 (on February 6, 2006) and touch an all-time high of 21207 (on January 8, 2008). It has taken much less — just 191 sessions — for it to return to 10000 and below.Over the past couple of weeks, it’s been more a question of when rather than if before the Sensex went 10000-under.In the end, it came quickly, as Dalal Street’s bellwether index plunged 606 points, or 5.7%, to close at 9975. Even as investors were willing to swap everything just for a stable market, not even a rally, an end to the carnage remained elusive. If Thursday’s late recovery soothed overwrought nerves, at Friday’s close fear had set in once again among investors, brokers, fund managers, all. For everyone, the question is, “When will all this end?” Some are even suggesting another 25% “correction”, that’s 7,500. Friday was one of those days when the old saying ‘morning shows the day’ went for a toss. Following a Dow rally of 421 points the previous night, the BSE Sensex opened nearly 200 points up and soon touched a high of 10787. Till midday, the Sensex remained in a narrow range of about 200 points. But after the London market opened, strong selling emerged from foreign funds and by late trades the index had crashed to 9911, its first foray in the four-digit region in over two years.The slide was so severe, all the 30 Sensex scrips, considered blue chips, ended in the red. The best performer among them was HDFC — which on Thursday announced a 29% rise in quarterly profits — and the stock still ended 1.4% lower at Rs 1,777. Of the 30 Sensex stocks, 21 lost over 5% from Thursday’s close. The day’s crash led to a Rs 1.6 lakh crore erosion in investors’ wealth with BSE’s market cap at Rs 32.1 lakh crore.Strong FII selling was one of the reasons for the panic offloading that followed. “It seems that some hedge funds are facing unprecedented redemption pressure and were aggressive sellers,” an institutional dealer with a local brokerage said.Brokers and dealers expect another panic selling in early trades on Monday, but then the market could stabilise. The day’s slide was aggravated by talk that the DMK, Tamil Nadu’s ruling party and also a member of the Congress-led ruling alliance at the Centre, had threatened to withdraw support to UPA over India’s stand against supporting the Sri Lankan separatist group LTTE.
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