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Praveen Gurwani
RBI sends Sensex crashing 400 pts; steepest fall since Sept 11
MUMBAI, DEC 11: Bears mauled the equity markets on Monday, gaining strength from the decision by the Reserve Bank of India (RBI) to hike the cash reserve ratio by 50 basis points, and dragged the 30-share BSE Sensex deep into the red. Bulls rallied unsuccessfully, with the Sensex losing a hefty 400 points.
The BSE Sensex lost 2.90% to close the opening day of the week at 13,399.43. This is the Sensex’s lowest closing since November 10, 2006 and the ninth largest single-day fall to date. The last major drop in the Sensex occurred on September 11, 2006, when the index lost 368 points.
Meanwhile, in line with the day’s sentiment, the broader S&P CNX Nifty of the National Stock Exchange (NSE) closed the day at 3,849.50, down 113.50 points or 2.84%.
Ambarish Baliga, an analyst at Karvy Stock Broking, said, “The hike in the CRR was only a trigger, mainly affected banking stocks. But overall, the market has fallen under its own weight, as valuations have been overstretched for quite some time. Also, the market was moving up due to high liquidity.” He cautioned investors that if the market did not recover in the next two or three days, it could slide further, stabilising around the 12,000-12,200 level. “Daily traders should strictly trade with a stop-loss,” he said.
The market breadth was deep in the red through the day, as losers outpaced gainers by a large margin. The BSE mid-cap was down 2.51%, while the BSE Small-cap was down by 2.70%. A total of 1,977 BSE stocks lost ground, with only 592 stocks gaining ground. Another 42 stocks ended the day on a flat note. Among the Sensex pack, all 30 index constituents ended the day deep in the red.
Selling pressure on the bourses was intense and across the board. The combined turnover on the BSE and NSE jumped to Rs 14,265 crore, against the previous Rs 11,704 crore. However, when there was intense selling, FIIs were net buyers to the tune of Rs 334 crore, according to provisional figures furnished by the stock exchanges.
MUMBAI, DEC 11: Bears mauled the equity markets on Monday, gaining strength from the decision by the Reserve Bank of India (RBI) to hike the cash reserve ratio by 50 basis points, and dragged the 30-share BSE Sensex deep into the red. Bulls rallied unsuccessfully, with the Sensex losing a hefty 400 points.
The BSE Sensex lost 2.90% to close the opening day of the week at 13,399.43. This is the Sensex’s lowest closing since November 10, 2006 and the ninth largest single-day fall to date. The last major drop in the Sensex occurred on September 11, 2006, when the index lost 368 points.
Meanwhile, in line with the day’s sentiment, the broader S&P CNX Nifty of the National Stock Exchange (NSE) closed the day at 3,849.50, down 113.50 points or 2.84%.
Ambarish Baliga, an analyst at Karvy Stock Broking, said, “The hike in the CRR was only a trigger, mainly affected banking stocks. But overall, the market has fallen under its own weight, as valuations have been overstretched for quite some time. Also, the market was moving up due to high liquidity.” He cautioned investors that if the market did not recover in the next two or three days, it could slide further, stabilising around the 12,000-12,200 level. “Daily traders should strictly trade with a stop-loss,” he said.
The market breadth was deep in the red through the day, as losers outpaced gainers by a large margin. The BSE mid-cap was down 2.51%, while the BSE Small-cap was down by 2.70%. A total of 1,977 BSE stocks lost ground, with only 592 stocks gaining ground. Another 42 stocks ended the day on a flat note. Among the Sensex pack, all 30 index constituents ended the day deep in the red.
Selling pressure on the bourses was intense and across the board. The combined turnover on the BSE and NSE jumped to Rs 14,265 crore, against the previous Rs 11,704 crore. However, when there was intense selling, FIIs were net buyers to the tune of Rs 334 crore, according to provisional figures furnished by the stock exchanges.