After the plunge, recovery: Sensex climbs to 10,500

vengabeats

Par 100 posts (V.I.P)
The stock market made a smart recovery after the trade was suspended for an hour for the second time in the indices' history after hitting a 10% low. The first being on May 17, 2004.

After plunging over 1,100 points, the BSE Sensex made a recovery of 700 points to close above the 10,500 level.

The 30-share benchmark index fell 1,111.70 points at 9,826.91.

Similarly, the NSE Nifty fell 345.90 points at 2,901.00 below the 3,000 mark. The Nifty aslo made a pull back from its lower levels to close at nearly 3,100 level.

There was heavy selling across sectors which dragged the indices to its lower levels.

After an hour-long suspension, stock markets resumed trading at 1300 hours. The recovery followed strong statements and appeals by Finance Minister P Chidambaram and market regulator M Damodaram that there was no cause for panic and there was no liquidity crisis.

The revival was largely on account of huge buying by domestic funds, according to market analysts.

Among the gainers, Reliance Energy and Cipla returned to the positive territory as the stock market embarked upon a recovery path following a one-hour suspension of trading forced by the benchmark Sensex hitting a lower circuit limit of more than 10 per cent.

A host of bluechip counters saw fresh buying interest at their lower levels, but Reliance Energy and Cipla were the only two Sensex scrips that managed to break into the green by afternoon trade.

REL was trading 1.2 per cent up at 519.90, after hitting a 52-week low of 458.60 earlier in the trading session.

Cipla moved up 0.7 per cent to Rs 223, after hitting a new 52-week-low of Rs 178 earlier in the trading session.

The BSE Sensex recovered nearly 700 points after plunging by 1,111.70 points this morning.

Tata Motors, NTPC, Wipro, ACC and L&T were among other major Sensex scrips that recovered from their lower levels.

In the BSE-100 index, by afternoon nine scrips were trading in green, in BSE-200 14 scrips were trading in the positive sector and while in BSE-500 index there were 25. trade.

In the 50-stock Nifty, Reliance Energy and Dabur India were the two trading in the positive territory, while Reliance Industries, Tata Steel , Satyam, Infosys, Tata Motors, ONGC, ACC, Cipla, L&T, TCS , Grasim, Bajaj Auto, BHEL, IPCL, Maruti, HDFC, ABB and Tata Power also came off sharply from their lower levels.

A total of 195 scrips were trading with gains against 2,108 scrips trading in the red on the BSE.

Sorce : Economic times
 

ANUJ

New member
Panic stricken market recovers after crash

In the worst bleeding of the stock market, the Sensex crashed by a whopping 1,112 points, forcing suspension of trading and a swift action by the government and regulator that calmed panic stricken investors and brought in a semblance of sanity.

As the UPA government celebrated its second anniversary, the mayhem in the market rekindled memories of one of the biggest falls on May 17, 2004, ahead of the swearing in of Manmohan Singh as prime minister.

The nerve-wracking volatility in the market, which recovered partially to cut losses to 456 points, was triggered by a variety of reasons including apprehensions about a payment crisis and a confusion about taxation proposals on stock trading, as also the effect of a global meltdown.

Coming on top of the meltdown last week, marketmen were caught totally offguard by the steep plunge this morning after what appeared a good day with the Sensex opening strong by over 200 points.

Last week's crash was attributed to speculation about higher taxes on FIIs. The crash came nearly an hour after the market witnessed fluctuations coinciding with the Central Board of Direct Taxes' strong denial of reports that investors were at the mercy of tax officials in relation to definition of traders and investors.

Assuring investors that there was nothing amiss and he would take all steps to avert any liqudity problem, Finance Minister P Chidambaram went out of the way to pacify the market, even though his ministry said that the selling spree by brokers possibly led to pressures and then a market crash.
 

ANUJ

New member
Finance ministry blames brokers for crash

Seeking to shift the blame onto the brokers community for the worst ever crash in the stock market, which lost over 1,100 points, the finance ministry today said in New Delhi that the impact of the CBDT circular on the volatility was doubtful.

In fact Foreign Institutional Investors and Mutual Funds are net buyers since this morning, senior finance ministry officials told reporters after an emergency meeting with Finance Minister P Chidambaram.

"It appears that some brokers trading on the proprietary account may have come under margin pressure and, therefore, may have sold," economic affairs secretary Ashok Jha said.

Jha said the effect of speculative report about the CBDT draft circular on the volatility in capital market is doubtful.

He said the draft circular made no reference to FIIs, who are governed by separate provisions of the Income Tax Act and the relevant Double Taxation Avoidance Agreement.

A variety of other factors including the decline in global markets, fall in metal prices, the hardening of interest rates and the comparative effectiveness of other emerging stock markets also played a role in today's market performance.

SOURCE:MID-DAY
 
Top