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Markets take cues from U.S.: Chidambaram

— PHOTO: AP

CRISIS DEEPENS: A road sign is seen on Dalal Street, the road on which the Bombay Stock Exchange, the building on the right, is located in Mumbai. Share prices dropped sharply amid worries of deepening weakness in the global financial system.

MUMBAI: Bears ruled the roost in stock markets on Monday with Bombay Stock Exchange benchmark Sensex crashing by over 950 points to close below the 15k-level on an onslaught of selling, triggered by global gloom, in which many a heavyweight stock, including market leader Reliance Industries, crumbled.

The 30-share Sensex, after tumbling to a low of 14738.27 in intra-day, finally settled at 14809.49, a loss of 951.03 points or 6.03 per cent, over its previous close.

Meanwhile, Finance Minister P. Chidambaram, while speaking in Parliament, said Indian stock markets were taking cues from the U.S. and Asian markets, even though sub-prime mortgage crisis had only moderately affected flow of funds into the country.

The broad-based S&P CNX Nifty of the National Stock Exchange also dropped by 242.70 points or 5.11 per cent to 4503.10.

Monday’s onslaught was across-the-board and it was reflected in the Sensex stocks and sectoral indices.

While no index shares posted gain, all indices closed in the red.

The indices recorded a fall in the range of 3.2 per cent to 9.7 per cent bearing the brunt of aggressive selling.

Capital goods, metal, realty, bankex and consumer durables which lost in the range of 6-10 per cent, bore the maximum brunt.

Among the Sensex losers, ICICI Bank topped the list with a hit of 13.76 per cent. Reliance Energy, Hindalco, HDFC and new Sensex entrant Jaipraksh Associates, which lost in the range of 8-12 per cent, closely followed ICICI Bank.

According to dealers, buyers are deserting the markets for the last few days on expectation of further fall in share values due to unending sub-prime mortgage related problems.

Angel Broking Chairman and Managing Direcgtor, Dinesh Thakkar, told PTI that “The sub-prime mess which started unfolding last year has reached bigger proportions and has been jeopardising the liquidity situation globally. The grim situation is reconfirmed by the Fed’s move which has been on a desperate interest rate cutting spree.”

“Global sentiment has been at the lowest levels in a long time and this is being reflected in the acute risk averseness of investors who seem to have shunned equities for the time being,” he added.

All eyes are now set on the U.S. Fed’s meeting tomorrow, expecting nearly one per cent basis points cut in the benchmark interest rate to revive the economy which is already in recession.

Market participants felt that there might be a knee-jerk reaction to that but wanted to see the effectiveness of that before making any fresh commitments. The market breadth was still negative with 2,404 shares registering losses against 282 closing with gains. — PTI

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