In its biggest ever rout in a single trading session in the current fiscal, the country’s premier stock exchange BSE’s benchmark index suffered a massive decline of 541.74 points to 15,234.57 points at the end of the closing hours on Friday. Brokers attributed downturn in the market to the concern that a worsening US housing downturn will curb growth in the world’s biggest economy.

At the end of closing hours here, BSE Sensex at 15,234.57 points accounted for a decline of the 3.4 percent of the previous closing, while NSE’s benchmark index, S&P CNX Nifty declined by 3.78 percent to 4,445.20 points from the previous closing of 4619.80 points, a fall of 174.60 points.

On BSE, nation’s most valued firm Reliance Industries fell by Rs 74.55 at Rs 1,866.45 while the country's second-largest lender ICICI Bank dropped Rs 30.85 to Rs 914.25.

Biggest drop
This decline at the BSE Sensex is the biggest rout in a single trading session in nearly four months, maintain brokers. “Our markets are no longer insulated from global vagaries and are now falling on global cues from the US,'' said A Balasubramaniam, Chief Investment Officer at Birla Sun Life Asset Management Company here. Sanjay Sinha, Chief Investment Officer, SBI Funds Management opined, “I think the fall is good as it will help our markets consolidate after the one way rise to records.”

The previous biggest point fall in Sensex had occurred in early April 2007, when it had tumbled 617 points on April 2, 2007 following the Reserve Bank of India (RBI)’s surprise hike in interest rates announced after trading hours on 30 March 2007.

This Friday's fall was triggered by a setback in Asian markets, say brokers. Stocks across Asia fell on Friday after the US market dropped 2.3 percent on Thursday on signs of further weakness in the US housing finance market and deteriorating conditions for corporate buyouts.

The fall was broad based as all the sectoral and niche indices on BSE ended in the red. The market breadth was weak, where 1,951 shares declined on BSE as compared to 570 that rose, while 55 were unchanged. Losers outnumbered gainers by a ratio of 3.4:1.

The key event next week is the review of the monetary policy by RBI on Tuesday.  Indications available here suggests that RBI is likely to keep rates steady. However, it remains to be seen whether the central bank will raise CRR to suck out excess liquidity in the banking system.

Stocks tumble in Asia on US cues
Tokyo, afp: Share prices tumbled across Asia on Friday as a sharp fall on Wall Street triggered new fears that woes in the US housing sector could affect the global economy, dealers said. The Tokyo market, the world’s second largest, closed at a near three-month low, while several other major regional bourses were down by some two per cent in afternoon trade.

Market players around Asia are carefully watching to see if the US troubles spread across the Pacific, said analysts. US shares plunged on Thursday by more than 300 points, although they pared losses in late trade, with investors gripped by anxiety over the housing market.

The US Commerce Department said sales of new homes dropped in June to the lowest level in three months, raising fears that trouble will spread more widely to other parts of the world’s largest economy.