Sensex down to 28-month low of 9,771.70 pts

MUMBAI: The Bombay Stock Exchange bellwether Sensex on Thursday slipped below the 10,000 level to close at over two-year low of 9,771.70 points on sustained selling by funds across counters.
    
After opening lower by 500 points, the BSE barometer showed signs of recovery at mid-session before closing the day down by nearly 400 points.
    
The 30-share index finally ended the day at 28-month low of 9,771.70, a fall of 398.20 points or 3.92 per cent, while National Stock Exchange index Nifty also ended at 28-month low of 2,943.15, lower 122 points, or 3.98 per cent.
    
Marketmen said fears of global economy falling into a recession and deepening credit crisis further weighed heavily on investors' mind.
    
A free fall in global markets also cast a shadow on domestic bourses. Global indices fell by about 4-7 per cent.
    
Dow Jones Industrial Average overnight plunged over 500 points falling below the crucial 9,000 level, while Nikkei also closed lower by 4 per cent.
    
The government this afternoon said the market regulator SEBI has disapproved the lending to offshore entities and has asked Foreign Institutional Investors to reverse short positions on borrowed shares.
    
The market bounced from its early lows and traded in the green for a brief period in late afternoon trade soon after the statement by Finance Minister P Chidambaram.
    
Analysts noted that several monetary measures to inject liquidity in banking system and RBI's latest decision to ease norms on overseas borrowing by corporates have failed to soothe fears.
    
The Domestic Institutional Investors tried to provide support to the depressed market by making heavy purchases. They were net buyers so far in the week having bought shares worth Rs 1,200 crore in three days.
   
Meanwhile, metal stocks were the biggest losers during the day with the BSE metal index plummeting by 622.53 points, or 11.08 per cent, due to sliding metal prices on LME.
    
Steel major Tata Steel plunged by 14.85 per cent after Moody's Investor Service on Wednesday downgraded the company's outlook rating to negative from stable.
    
Other prominent losers were Tata Motors 14.57 per cent, Hindalco 13.10 per cent, Ranbaxy 10.94 per cent, Mah&Mah 9.77 per cent Maruti Suz 8.82 per cent, ICICI Bank 7.79 per cent, Bharti Airtel 7.76 per cent, HDFC 7.71 per cent,
Stetlite Ind 7.47 per cent, Jaiprakash Asso 6.41 per cent and SBI 4.84 per cent and RIL 7.62 per cent.
   
However, Grasim Ind gained 4.74 per cent, BHEL 2.74 per cent, L&T 2.43 per cent and HDFC Bank 2.23 per cent.
   
The market breadth was extremely negative with 1,908 losers against 622 gainers on the BSE.
   
The trading volume remained low at Rs 3,754.82 crore. RIL clocked the highest turnover of Rs 281.19 crore followed by Reliance Capital (Rs 268.91 crore), SBI (Rs 201.76 crore), ICICI Bank (Rs 181.82 crore) and RPL (Rs 153.51 crore).
    
The broad-based BSE-100 index fell further by 215.13 points or 4.12 per cent to 5,011.86 from its last close.
    
The sectorial indices such as the BSE Auto index slumped by 7.21 per cent, the BSE Oil&Gas index by 5.30 per cent and the BSE Realty index by 5.26 per cent.