Business

Sensex dips below 9000 again, IT stocks take a hit

MUMBAI: Extending the losing streak to the fifth straight day, the bellwether Sensex on Tuesday closed below 9000 level in nearly three weeks amid ruins in global bourses on heightened fears of prolonged economic recession.

The Bombay Stock Exchange 30-share barometer settled the day at 8937.20, a fall of 353.81 points from its previous close.

Sustained selling pressure of the past five days has shaved off more than 1500 points from the Sensex.

The barometer last closed below 9000 level on October 27.

IT stocks suffered the most with Infosys, Satyam, TCS and Wipro registering sharp losses.

The 50-share Nifty index of the National Stock Exchange also tumbled by 116.40 points to close at 2683.15.

Brokers said there seem to be no takers for the Government assurances on fresh monetary measures to mitigate the impact of global financial crisis.

The Reserve Bank Governor D. Subbarao said on Tuesday that the apex bank was continuously monitoring the liquidity situation and would decide on its future course of action on interest rates at an appropriate time.

Finance Minister P Chidambaram asking industry to cut prices did not actually impact investor sentiment, they further added.

Marketmen said besides sustained capital outflows, the prevailing political situation with Assembly elections in the five states added to the woes.

Global stock markets slumped on Tuesday as the bad news on the financial crisis got worse, with Japan, the world’s second largest economy, in recession and the U.S. banking giant Citigroup cutting 50,000 jobs.

Dealers said hopes that a Group of 20 meeting of developed and developing nations in Washington on Saturday would produce concrete action were disappointed, with leaders only calling for greater coordination.

“The global economy is in recession,” said Royal Bank of Scotland economist Robert Lind.

“Continuing frailty in financial markets, much weaker growth and sharply lower inflation could trigger concerns about a protracted slump,” he said.

On Wall Street, stocks opened lower and kept falling as investors bemoaned the lack of a G20 lead and digested the unrelenting flow of bad news. European markets too were lower by about 1.3 to 2.0 per cent in their early trade.

The Indian rupee is closing in on 50-mark against the dollar as the domestic currency lost 33/34 paise on sustained capital outflows and fresh demand for the greenback from oil refiners.

The rupee closed at 49.67/69 cheaper, its lowest level in more than two weeks.

Moving in sync with weak trends in stock markets, the rupee hit a low of 49.80 level during intra-day before recovering some losses.

Dealers in foreign exchange said growing fears of exports being hit by a longer worldwide recession cast a shadow on rupee sentiment.

They said fresh dollar demand from oil refiners amid continued portfolio outflows exerted pressure on the rupee during the day. Bearish equity markets and fears of more outflows in view of recession in major economies also weighed on the rupee sentiment. Finance Minister P Chidambaram’s statement that the government will take steps to stimulate the domestic economy failed to have any impact on the exchange market. — PTI

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