Indian equity markets had a nightmarish session with both the benchmark indexes losing 4% with over Rs. 2.20 lakh Crore of investor wealth eroded in a single trading session. Sensex recorded its largest single day fall in four years. No single sector was spared. All sectoral indexes had deep cuts by the time the markets closed today. Today’s fall not only gave up all the gains the markets and individual stocks notched up the last four trading sessions but has actually slid past the previous lows. Markets are now firmly in the grip of the bears.
Its not the fall that worried the markets today but the pace of the fall that roiled the markets. Blue chip stocks like BHEL, JP Associates and Axis Bank were all down 10% a piece. Banks, Metals and Realty stocks were the worst hit. Surprise addition to the list were the cement stocks. Bond markets weren’t spared either with 10Yr G-Sec yield inching all the way up to 8.89%.
Markets started off with a slight negative bias with rupee opening flat. However irrespective of how much effort the FM and the RBI have put behind the currency, the currency began to weaken and that blew the day lights off the markets. Rupee hit a fresh life low of 62.01 intraday. Late in the day state owned banks sold dollars pulling the rupee off the lows. The Rupee closed at 61.65 a fresh closing low for the partially convertible currency.
Yesterday Gold and Silver rallied in the international markets, adding to it was our own currency weakness, now a regular phenomenon, gave a push to our commodity markets. Gold is now at a six month high as gold beached 30500 mark today and is close to all time highs. This is after the metal has lost over 30% from its peak in dollar terms.
After today’s fall markets are firmly in the grip of the bears and we will have to wait and see what is in store for us the next few days and weeks.
—– Harish Sridharan
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