MUMBAI: Sensex opened below 10,000 mark on Thursday following sharp declines overnight in US and Asian stocks, which tumbled to 5-year-lows, amid
heightened worries over a global recession. ( Watch )
National Stock Exchange’s benchmark Nifty tumbled 134 points or 4.39 per cent to 2930.
Bombay Stock Exchange’s 30-share Sensex shed 478 points or 4.71 per cent to 9682from Wednesday’s close.
US stocks plunged on Wednesday as a raft of disappointing corporate earnings from major US companies fueled pessimism about the global economy despite further thawing in credit markets.
The Dow Jones industrial average sank 514.45 points, or 5.69%, to end at 8,519.21, the Standard & Poor's 500 Index slumped 58.26 points, or 6.10%, to finish at 896.79 and the Nasdaq Composite Index slid 80.93 points, or 4.77%, to close at 1,615.75.
Asian stocks tumbled Thursday, with the Nikkei plunging more than 4%, after another dive on Wall Street. The broader Topix lost 4.83%, Hang Seng lost 4.61% and Straits Times declined 2.93%.
It was not just that the equity markets that suffered, commodity markets were also badly punished. Copper and aluminium tumbled to their lowest in almost three years on Wednesday, dragged down by worries about slowing demand for metals and a resurgent dollar. London Metal Exchange copper for delivery in three months dropped to $4,099 a ton, its weakest since November 2005 and closed at $4,160 per ton versus $4,500 on Tuesday.
US crude futures ended down more than 7 percent, hitting a fresh 16-month low, after government data showed domestic crude stocks rose much more than expected last week. On the New York Mercantile Exchange, December crude settled down $5.43 at $66.75 a barrel. Gold tumbled, reflecting a slide across commodity prices, as the dollar firmed to a two-year high against the euro. Spot gold fell more than 3% to a session low of $743.45 an ounce.
Back home, in a yet another effort to boost capital inflows, the Reserve Bank of India on Wednesday raised the ceiling on overseas borrowing by domestic firms to $500 million from $100 million. Companies can use the new facility without the central bank's approval for rupee or foreign currency spending. The changes to the borrowing
rules will take effect immediately. It also scrapped a rule that required loans above $100
million for infrastructure spending to have a minimum maturity of seven years.
On the data front, India's annual inflation rate is forecast to have eased to 11.35 percent in the 12 months to Oct 11 from 11.44 percent a week earlier. The wholesale price index is due around 6 pm on Thursday, just ahead of a monetary policy review on Friday, although it has been superseded by Monday's surprise 100 basis point cut in the repo rate by the central bank.
Weakness in global markets and lack of investor confidence saw the Indian stock market benchmarks wipe off gains made in last two trading sessions on Wednesday. Bombay Stock Exchange's Sensex ended at 10,169.90, down 513.49 points or 4.81% from Tuesday's close. The index touched a low of 10,128.22 and high of 10,484.85. National Stock Exchange's Nifty closed at 3065.15, down 5.25% or 169.75 points. The broader index touched a low of 3051.80 and a high of 3235.75.
