Tuesday, November 13, 2007

Sensex gripped with global meltdown recovers

The Indian markets saw a gap down opening at
18,640.52 level down by 267.08 points taking cues from
the global markets as Asian indices declined sharply. The
global meltdown led by worries on account of US sub
prime crisis has again resurfaced and is spreading
deeper into the credit markets which will eventually slow
down the growth of the US economy. However, during
mid session the markets recovered from earlier losses,
led by recovery in some heavy weights. FMCG goods
were in demand despite weak market and RIL and SBI
came off lower levels tracking European markets that
have opened flat to negative without any sharp cuts
which has helped the markets to gain some ground. The
markets have shown marginal recovery towards the end
with Sensex closing the day in red at 18,737.27 level
down by 170.33 points 0.90%. Sensex in today’s trade
swung nearly 481.90 points in its high of 18,815.11 level
and a low of 18,333.21 level.
SBI rebounded from lower levels and closed at Rs. 2,240
following news that Union Cabinet is likely to take a call
by 22 Nov, 07 on SBI’s proposed plan to raise about Rs.
18,000 crore through rights issue.
Reliance Industries came off from the day’s low of Rs.
2,602 on news that the company has reportedly signed a
contract for a second deep water exploration block off the
coast of Gulf State Oman.
NSE benchmark Nifty 50 index closed at 5,617.10 points
down 0.81%.
The market breadth on monday's trade remained negative
with about 1017 shares advancing, 1697 shares
declining, and 54 shares remained unchanged.
Currently PE of the Sensex stands at 24.27
Asian stocks tumbled, led by Hong Kong's Hang Seng
(biggest drop in three months), on speculation that HSBC
and other banks will report increased losses related to
U.S. sub prime mortgages and after Credit Suisse Group
said China will delay a plan to allow mainland citizens to
buy the city's shares. Japan’s Yen strengthened against
the dollar as a slump in Asian stocks prompted investors
to cut carry trades funded with money borrowed in Japan.
U.S. stocks tumbled to a two-month low after banks
reported mounting losses from bad home loans and
major banks warning of further losses on their debt
portfolios, raising investor concerns that the credit market
worries are not yet over. The Dow Jones Industrial
Average lost 223.55 points to 13,042.74. The NASDAQ
Index fell 68.06 points to 2,627.94.
European indices, that have opened flat to negative,
were trading mixed. European equities rose to day’s high
on Monday and wiped out early losses, supported by
gains in beaten down banks as Barclays, Royal Bank of
Scotland and UBS all were up. UK’s FTSE 100 index
rose boosted by a 14% jump in insures Standard Life
after it withdrew from a 4.9 billion pound battle for rival
resolution.

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