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Market mayhem continues

MUMBAI: After tanking over 1000 points in minutes after opening, the benchmark Sensex staged a moderate recovery but still closed lower by more than 800 points at 10527.80, the lowest in more than two years, on sell-off spree which mirrored the panic among investors worldwide.

Even as the 30-share Sensex was recovering by mid-session on encouraging comments from the Finance Minister P. Chidambaram and reports of inflation declining against expectations, an abysmal performance in industrial growth pulled down the barometer again.

A moderate recovery in the key-index was backed by the RBI decision to cut CRR by one percentage point in addition to 50 basis points earlier this week. Marketmen said the steep fall in the beginning was triggered by weak global cues.

The selling pressure was further strengthened by weakening rupee which plummeted to its all-time low of 49.30 against the dollar before recovering to 48.46.

Later, particularly weak IIP data negated whatever positive sentiment emerged on a decline in inflation.

Marketmen said the meltdown in global financial markets could have a direct impact on India and pointed out that rupee has fallen to its lowest level, prompting investors to seek safer havens other than emerging markets. They noted that the rupee, equity and commodity market plunged while gold surged to an all-time high as investors buying the precious metal as a safe hedge. — PTI

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