Commodity Online NEW DELHI: Raising more concerns among investors, Bombay stock market bench mark index, the sensex plunged below 9000 mark on Friday shortly after the RBI’s credit policy was announced.
Analysts said apart from weakening global equity markets, dismal quarterly earnings by corporates also adversely affected the trading sentiments. Depreciating Indian rupee against the US dollar too dampened the trading sentiments here.
Now the situation is getting out of control as any actions or plans taken elsewhere in the world in relation with the financial crisis could affect the local stocks here in a more negative way.
If the trend goes like this, the sensex may well go down near 8000 marks as the market has disappointed with no rate cut in the credit policy and banking stocks are reeling under selling pressure, analysts said.
They said, many foreign institutional investors, faced with increased problems at home and an unwillingness to take on extra risks will sell their emerging market holdings and leave the market.
Earlier, the Rs 65,000 crore liquidity boosts announced by the government and RBI also failed to enthuse the stock market as heavy sell-off by foreign funds in the stocks of banking, metals, capital goods, oil and gas and power sectors continued to affect the stocks in a big way.
Series of measures taken to ease pressure on the financial sector has failed to enthuse the market, traders said.
The sudden crash in stock markets happened mainly on panic selling by investor’s especially in banking stocks and also on sharp losses in the global stock markets.
The Sensex has broken 9000 mark for the first times since June 14, 2006 and the Nifty also slipped below 2700. Metal, banking, realty, power, oil and auto stocks are extremely under pressure.
The 30-share index, which lost nearly 912 points in the last two sessions, plunged by 786.42 points to 8,985.28 points as all the sectoral indices, led by banking, were in the negative zone.
The National Stock Exchange index Nifty tumbled by 243.35 points to sink under 2,700 points 2,699.80.
The Reserve Bank of India has kept all key rates unchanged in the new credit policy .The GDP growth forecast has lowered to 7.5-7.8 per cent as against 8 per cent earlier.
Inflation target remained unchanged at 7 per cent by March end. The credit growth stood at 29 per cent currently but the RBI has kept target of 20 per cent.
