By IANS,
Mumbai : Indian equities markets once again went into a tailspin Tuesday and finished in the red with a key index shedding more than 350 points to end below the psychologically important 9,000 mark.
“With Asian economies such as Japan and Hong Kong also officially in recession and global leaders only reiterating that there is a problem without offering any solutions, there is only nervousness and no feel good factors,” said Jagannadham Thunuguntla, head of the capital markets arm and director of India’s fourth largest share brokerage firm, the Delhi-based SMC Group.
He was trying to emphasize the depth of the investors’ nervousness as bad news is continuing to break on a daily basis.
Consequently, markets opened weak and stayed in the red despite some short covering and the 30-share benchmark sensitive index (Sensex) of the Bombay Stock Exchange (BSE) finished at 8,937.20, down 353.81 points or 3.81 percent from its previous close at 9,291.01 points.
The Sensex opened lower at 9,084.12, down 206.89 or 2.22 percent and hit a low of 8,871.71 points before inching back a bit on short covering to finish at its closing value.
The broader-based 50 share S&P CNX Nifty of the National Stock Exchange (NSE) also showed a similar trend and closed at 2683.15, down 116.4 points or 4.16 percent from its previous close at 2,799.55 points.
The BSE midcap index finished at 3,060.32, down 73.04 points or 2.33 percent from its previous close at 3,133.36 points.
The BSE smallcap index closed at 3,558.66, down 102.73 points or 2.81 percent from its previous close at 3,661.39 points.
All 13 sectoral indices finished in the red with telecommunication, media and entertainment and technology, information technology, power and bank stocks losing the most.
Of the 30 stocks that make up the Sensex only Ranbaxy Laboratories showed a gain of 0.5 percent.
The biggest losers were Wipro, down 8.77 percent, followed by NTPC Ltd., down 7.88 percent, ACC Ltd., down 7.17 percent and TCS Ltd., down 6.96 percent.
As many as 1,831 stocks or 71.33 percent declined, 661 stocks or 25.75 percent advanced and 75 stocks or 2.92 percent remained unchanged.
The market sentiment is negative, analysts said.
“Just to put things into perspective an investor of the stature of Warren Buffet bought preference shares of Goldman Sachs some 50 days back at a valuation of $115 a share but now Goldman’s share price has fallen nearly by 50 percent to $61 a share,” Thunuguntla said, adding: ”This shows the market is discounting even when the blessing came from Buffet himself.”
“Similarly, the market is discounting what central banks are doing and saying, what governments are doing or saying as nobody seems to have an answer to the questions being asked,” he said.
“Even the G20 Summit or President-elect Barack Obama have only reiterated the problem without offering solutions so the message is loud and clear – no one has a solution to offer,” he said.
Overnight US markets had ended in the red with the key index of the New York Stock Exchange finishing 2.37 percent down and the Nasdaq index closed 2.29 percent down. European markets also finished lower.
Tuesday morning the Nikkei, key index of the Tokyo Stock Exchange closed 1.62 percent down and the Hang Seng, key index of the Hong Kong Stock Exchange finished 2.94 percent down.
Analysts said Tuesday afternoon European markets had opened weak and US futures which is traded in Europe had also opened weak. On top of that Citi Bank has announced that will lay off 50,000 employees, 14 percent of its total staff indicating even they are in deep trouble.
“It is being said Indian-born chief executive of Citi, Vikram Pandit has lost confidence of his board of directors for not acting fast enough to tackle the crisis,” Thunuguntla said, adding: ”But it remains to be seen if these lay-offs will help him to regain the board’s confidence.”
“Only God knows how sectors that are capital expenditure driven such as real estate can come out of this mess,” Thunuguntla said to emphasize that there are far too many factors eroding the confidence of investors and making them more and more nervous each passing day.