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Saturday, Oct 18, 2008
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U.S. recession fears hit bourses

Oommen A. Ninan

Sensex dips to a new low at 9975

MUMBAI: The Bombay Stock Exchange benchmark Sensex on Friday closed below the psychologically important 10000-level for the first time in two years as institutional investors continued their selling spree amid strong signs of recession in the U.S. becoming a reality.

After opening sharply higher, the 30-share barometer on the BSE shed 606.14 points or 5.73 per cent to close the day at 9975.35, a level last seen on June 19, 2006.

The 50-share Nifty of the National Stock Exchange also fell by 194.95 points, or 5.96 per cent, to 3074.35.

Marketmen said signs of uncertainty on the domestic political front, coupled with fears of U.S. recession becoming a reality, took a severe toll on the bourses. They further said that foreign institutional investors (FIIs) continued their selling spree in view of the bleak picture in the global financial markets. Brokers said less than expected corporate earnings also contributed to the fall in Sensex. They said efforts by the government and the Reserve Bank of India to ease money supply in the system had had no impact on investor sentiment.

While the world market trends were mixed, the U.S. markets at the opening hours on Friday showed a downward trend as reports emanated saying further deterioration in the housing sector fuelling recessionary fears. Gold prices were also falling in the international markets as investors sold gold to cover their other market losses.

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