For first time in 14 months, Sensex closes below 17,000

The mayhem in the global financial markets, triggered by downgrade of the US creditworthiness, hit the Indian stocks hard today and sent the BSE Sensex spiralling down 316 points to below the 17,000-level for the first time in 14 months.

Although the Sensex partly recovered intra-day losses of nearly 550 points, it still lost 315.69 points and closed at 16,990.18 -- the lowest level since June 10, 2010.

As a result, the market lost nearly Rs1,00,000 crore in value in a single day -- which has taken the total loss in past five trading sessions to an estimated Rs5,00,000 crore.

The losses, measured in terms of decline in value of all listed stocks, were as high as Rs2 lakh crore when the Sensex had plunged to the day's lowest level.

The Bombay Stocks Exchange (BSE) 30-share index, Sensex, has dropped by more than 1,300 points in the past five trading sessions, in line with a massive meltdown in markets across the world.

In the first trading session after global credit ratings agency S&P downgraded the long-term creditworthiness of the US from top-notch 'AAA' level on Friday evening, the Indian markets opened on a weak note and the Sensex dropped more than 500 points within minutes.

Weak cues from the Asian markets added to the woes, but a positive opening in European markets and bargain buying at lower levels helped the market recover some losses by the early afternoon trade.

At one point, the Sensex was down only 58 points, having recovered most of the early morning losses, when it had fallen to 16,759.45 points.

However, the recovery of such magintude was short-lived and the index again started moving downwards and finally ended the day with a loss of 316 points -- still better than the intra-day low point.

Meanwhile, the broad-based National Stock Exchange 50-scrip index, Nifty, tumbled below the 5,100 level, before recovering somewhat to close at 5,118.50, down 92.75 points.

Besides positive cues from Europe, where stock markets opened higher despite the worries of mounting debts in the eurozone nations, as well as in the US, the value buying of Indian stocks at lower levels helped the Sensex recover.

However, later, the European markets also moved into the negative zone, thus stalling the recovery on Indian bourses.

The stocks registering huge losses included Infosys, DLF, Hindalco, Tata Motors, TCS, Wipro and Tata Steel.

Companies like ONGC, M&M, Bajaj Auto and HUL managed to register gains, while RIL, ITC, SBI and Coal India narrowed their losses as trading session drew to a close.

Reliance Industries still dropped to its lowest level in more than two years with a fall of 1.40 per cent to Rs 780.60.

Analysts said that stocks of export-focused sectors were among the worst affected as the US and Europe are the prime destinations of India's overseas shipments.

Mutual fund house ICICI Prudential's managing director Nimesh Shah said that investors should look at every market correction as an investment opportunity and the US downgrade would have only a short-term impact.