Indian equities crash, pull key index down 4 percent


Mumbai : Indian equities crashed Wednesday pulling a key index down by 615 points or nearly four percent – its third biggest fall in history – on the back of weakness in Asian markets, notwithstanding a favourable monetary policy review by the central bank a day earlier.

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Blue-chip stocks took a major beating as the Sensitive Index (Sensex) of the Bombay Stock Exchange (BSE) fell below the 15,000-mark for the first time since it breached the magic mark earlier last month.

The Sensex was down 615.22 points, or 3.96 percent, at 14,935.77 points at close of trade, compared to the previous day's close at 15,550.99 points.

The barometer index opened lower at 15,344.02 points and continued to dip below the 15,000-point mark during intra-day trading amidst high volatility.

All the 30 shares that make up the Sensex ended in the red on a day of big sell-off.

The broader 50-issue National Stock Exchange (NSE) index, Nifty, was down 183 points down or 4.11 percent to close at 4,345.85.

Associated Cement Company led the losers, down 9.05 percent at Rs.964.00, followed by Reliance Energy, down 7.08 percent at Rs.737.30, aluminium maker Hindalco, down 6.44 percent at Rs.159.15 and drug maker Ranbaxy Laboratories, down 5.67 percent at Rs.367.80.

Other major losers included private telecom service provider Reliance Communication, India's largest steel maker Tata Steel, the country's most valuable company and index heavyweight Reliance Industries, multi-utility vehicle maker Mahindra and Mahindra, top lender State Bank of India and leading engineering and construction firm Larsen and Toubro.

"The markets took a cue from the sliding global market. There was a massive sell-off in the Asian markets that triggered of the crash Wednesday," Vishwas Diggikar, an analyst with a leading brokerage here, told IANS.

"With the US markets sharply down Tuesday, similar movements were expected in Asian markets as well and the Indian bourses have followed that trend. But the fundamentals definitely remain strong," another analyst said.

"Otherwise, the markets should have saluted the indications of tax cuts and some sops for specified sectors like food processing and the hospitality industry from the finance minister (P. Chidambaram) yesterday," the analyst added.

The Reserve Bank of India, in its first review of the monetary and credit policy for the current fiscal, had kept all major interest rates intact, while raising the cash reserve ratio by 50 basis points.

The measures were largely received well by the corporate sector and the markets.