Sensex nosedives on fears of U.S. retaliation

MUMBAI, SEPT. 14. Fears of U.S. strikes on terrorist groups and countries having terrorist bases triggered panic sell-off on bourses and the Sensex plunged below 2800 level during trading on the Bombay Stock Exchange today.

The BSE benchmark 30-share index opened slightly lower at 2986.86 and later spiralled downwards to hit the intra-day low of 2770.24. However, it recovered partly to close at 2830.12 against yesterday's close of 2987.50, a net fall of 157.38 points or 5.27 per cent, the biggest one-day fall since the rolling system was introduced on July 2 this year.

Domestic financial institutions, particularly Unit Trust of India provided timely support that could salvage the situation to some extent.Cash-strapped foreign funds led by Morgan Stanley which have reportedly suffered huge losses in the worst terrorist attack on the U.S. on Tuesday were aggressive sellers in almost all heavyweighted counters. Morgan Stanley alone, market sources said, sold shares amounting to over Rs. 300 crores after the attack.

Shares reeled under consistent pressure as talks of air strikes on neighbouring country spread like a wild fire when the U.S. asked Islamabad to close border with Afghanistan and allow American warplanes access through its airspace, market sources said.

The situation was considered to be extremely grave for the sagging U.S. economy with Tuesday's attacks on the twin World Trade Centre paralysing the financial activity. The U.S. markets including the Nasdaq remained closed continuously for the fourth day and would only reopen on Monday.

Surprisingly, Nikkei and Hang Seng recorded sharp gains by 395.80 points and 86.24 points at close respectively, while Singapore ST index tumbled by 38.37 points.

In the specified group, 166 including 28 index-based counters registered sharp losses while eight others finished with fractional gains.

The BSE-200 and the Dollex-200 showed steep losses at 292.56 and 102.11 against 311.39 and 109.05 respectively. The BSE-500 dropped by 54.82 points to 861.02 from 915.84 and the Dollex-30 was down by 28.82 points at 487.11.

- PTI

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