Sensex dips below 16,000

Troubled economy: Stocks & rupee tumble, deficit up

Sensex dips below 16,000

Selling pressure in index heavyweight Reliance Industries also added to the fall.
Intense selling in pivotals in late trade this day pulled the bellwether index of BSE below the psychological 16,000 level as European and US debt problems pulled world stocks lower. With this, BSE Sensex shed more than 1600 points in just eight days.

Market breadth was weak and all the 13 sectoral indices on BSE were in the red. Index heavyweight Reliance Industries (RIL) lost close to 2.5 per cent especially after the Oil Ministry sanctioned taking “scrupulous” action against the company for natural gas output from its KG-D6 fields having fallen below the target.  SBI, Bhel, NTPC, ICICI Bank, Tata Steel and Sterlite Industries hit 52-week lows, while metal stocks extended recent losses triggered by poor Q2 results from leading metal firms.

Foreign institutional investors (FIIs) sold shares worth Rs 871.62 crore on Friday and their outflow totaled Rs 1,965 crore in four trading session from November 15 to 18, 2011. Commenting on the market, Ambareesh Baliga of Way2wealth.com said: “Unless the rupee and the inflation fall in place he doesn’t see too much of a hope for the market at least in the short to medium term.”

Added Kotak Securities’ Dipen Shah,  “In the next couple of days, focus will shift to the US, wherein the 'Super Committee' has to come up with a solution on deficit reduction by November 23 (Wednesday). If an acceptable decision is not reached, it may have far-reaching consequences on the US ratings.”

The BSE Sensex tumbled 425.41 points or 2.6 per cent to settle at 15,946 points, its lowest closing level since 5 October 2011.

The 50-unit S&P CNX Nifty at NSE tanked 127.45 points or 2.6 per cent to settle at 4,778.35 in the day's closing, lowest since October 5, 2011.

The market breadth was weak with as many as 1,981 shares on BSE fell and 792 rose, while a total of 126 shares remained static.

During the day, European stocks slumped pressured by Euro-zone debt worries and concerns over a possible collapse in talks to cut the US deficit ahead of Wednesday's deadline. The key benchmark indices in UK, Germany and France were down by between 1.82 to 2.35 per cent.

Asian shares lost ground this day with European and US debt problems firmly in focus for the region's investors. Key benchmark indices in China, Hong Kong, Japan, Indonesia, South Korea, Taiwan and Singapore fell by between 0.06 to 2.64 per cent. Trading in US index futures indicated that the Dow could fall 146 points at the opening bell on Monday.

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