IBN: Mkts crash on weak global cues; Nifty struggles at 3200
Mumbai: Benchmark indices have shattered in early trade following steep fall in US and Asian markets, as poor economic data fueled recession worries over United States. The Nifty and Sensex have hit new-2008 lows on Thrusday.
Vibhav Kapoor of IL&FS expects the Nifty to trade in a broad range of 3,000-3,800 over the next few months.
“We could have occasional days, if there is some global panic or some bad news coming from somewhere, where the Nifty might touch 2,800 or 2,900. Those would only be intra-day or for a day or two and the sustainable range at which the markets are going to trade in the next several months would be 3,000-3,800."
At 9:58 am, the Sensex fell 613 points to 10,195 and the Nifty lost 178 points to 3,159. CNX Midcap tumbled 4.6% to 3,818.
L&T, Hindalco, Suzlon Energy, Reliance Industries, Sterlite Inds, HCL Tech, Reliance Infrastructure, Wipro, TCS, Infosys, Unitech, Reliance Communication, ONGC and ICICI Bank have smashed out.
BSE Realty, Metal, Capital Goods, IT, TECK, Oil & Gas, Power indices are down 6-7%. Bankex, FMCG, Healthcare and Auto indices fell 4-5%.
This free fall is in despite of RBIs move of 100 bps CRR cut to 6.5% in late evening yesterday to increase liquidity in banking system. Due to which, Call Rate declined to 6.5-7% from 9.75-10.25% on Wednesday. RBI had already cut CRR by 150 bps last week.
Asian markets also shattered in line with US markets. Nikkei fell 9%. Hang Seng, Straits Times and Kospi dropped 6.5-8.5%. Shanghai fell 3.7%, Taiwan -3.3% and Jakarta -4.09%.
Crude has fallen 5% on economic worries and OPEC update. It is trading around USD 73 to a barrel. OPEC has cut demand forecasts after IEA, EIA. OPEC has revised 2009 demand for OPEC crude by 190000 bpd to 31.14bpd.
OPEC said that the forecast based on world economic growth is slowing to 3.8% this year and 3.3% in 2009.
Base metals also crashed. Copper has declined 5.5%. Nickel, Zinc and Lead fell 6-7.5%. Commodity Freight rates are at 5-year lows. Baltic Dry index fell 11%.
US markets plunged the most since the crash of 1987, as disappointing retail sales data and credit concerns renewed economic fears. Specifically, the S&P 500 plunged 9%, settling near session lows & the Dow closed below the 9000 mark.
Consumers continue to curtail spending in the face of economic headwinds. Retail sales in September tumbled 1.2% month-over-month, the third consecutive monthly drop and largest decline in three years.
The Dow tumbled 733.08 points, or 7.87%, at 8,577.91. The S&P 500 index lost 90.17 points, or 9.03%, to 907.84, and the Nasdaq composite index declined 150.68 points, or 8.47%, to 1,628.33.
Market cues:
RBI cuts CRR by another 100 bps to 6.5% with retrospective effect from Oct 11
SEBI seeks FII data on sale of equities on borrowed stocks twice a week
FIIs net sell USD 46.9 milion in equity on October 14 versus provisional net buy figure of $187 million
MFs net sell Rs 260.8 crore in equity on October 14: SEBI
NSE F&O Open Interest down by Rs 1,347 crore at Rs 69,145 crore
F&O cues:
Futures Open Interest down by Rs 1,218 crore and Options Open Interest down by Rs 129 crore
