Indian stocks started sneezing again as the US chill resurfaced with fresh reports of auto majors General Motors and Chrysler going bankrupt.
Indian stocks started sneezing again as the US chill resurfaced with fresh reports of auto majors General Motors and Chrysler going bankrupt. Ending the two-week, 2,000-point rally, the Sensex lost 480 points, or 4.8%, to close at 9,568 on Monday.
Over Rs1.05 lakh crore of investor wealth was eroded on Monday in the biggest Sensex fall in three months. “It is global cues. Fears of bankruptcy of US auto companies have spooked the markets,” said Amitabh Chakraborty, president, equities, Religare Securities. Asian indices lost between 1% and 5% while European markets were also trading in the red.
The recent rally, in which the Sensex galloped from 8047 to 10048 in 14 sessions, rode on the back of the Geithner Plan, the US treasury secretary’s proposal to buy back troubled assets to revive the economy.
LS polls will add to uncertainty in markets
Bombay Stock Exchange’s sensitive index or Sensex fell 480 points on Monday with fresh fears of US auto giants General Motors and Chrysler going bankrupt bringing the markets down.
The fall ended the two-week rally, which rode on the US treasure secretary’s plan revive the economy. The plan was received positively by the New York Stock Exchange and markets globally. But with global markets taking a turn for the worse, India has followed suit.
Foreign institutional investors, who bought stocks in excess of Rs3,450 crore during the rally, were net sellers, offloading Rs452 crore on Monday. Ajay Argal, co-head of Equity Investments at Birla Sun Life Mutual Fund, said: “In the short term one can expect the markets to be highly volatile. We would be looking at data points such as IIP numbers, export figures, and corporate results.”
Companies would start declaring Q4 results by the end of next week. But marketmen do not see a definite direction in the near future with elections round the corner.
Navneet Munot, chief investment officer at SBI Mutual Fund, said, “Right now, we have a joker in the pack called the elections. Once the new government is in place, the uncertainty on that front would end and we would see sentiments stabilising. Then some action is expected in the markets.”
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