Sensex records biggest slump in 9 months

Sensex records biggest slump in 9 months

Sensex records biggest slump in 9 months

Key benchmark indices on Thursday ended nearly two per cent lower dragged by index heavyweights ICICI Bank, RIL and ITC along with weakness in global markets on the back of concerns that US Federal Reserve may scale-back its economic stimulus or third round of quantitative easing (QE3).

The BSE Sensex lost 317.39 points or 1.62 per cent to settle at 19,325.36, its lowest closing level since December 27, 2012. The CNX Nifty at NSE lost 90.80 points or 1.53 per cent to settle at 5,852.25 in the day's closing, which is lowest from December 21, 2012.

Minutes of the Federal Open Market Committee’s January 29-30 meeting released on Wednesday showed policy makers were divided on the strategy behind Chairman Ben S Bernanke’s programme of buying bonds, amid hints of premature withdrawal of stimulus, also dampened investor sentiment in D-Street.

Also, domestic sentiments were jittery as the crucial Budget session of Parliament began on Thursday with the UPA-led government set to face a stiff challenge because of the controversies surrounding the chopper deal. Besides, heavy capital outflow before the budget on fears of imposition of taxes to narrow budget deficit.

Index heavyweight Reliance Industries (RIL) lost 2.12 percent to Rs 856.75 on BSE. Among others Hindalco, Jindal Steel, Larsen & Toubro, Bharti Airtel, BHEL, HDFC Bank, Mahindra & Mahindra, Maruti Suzuki, Tata Motors, State Bank of India and Sterlite Industries fell sharply.

Kotak Securities' Dipen Shah said: "The markets turned distinctively weak today and closed at the lowest levels in 2013. We believe this was largely due to the weakness in global markets."

Meanwhile during the day abroad, European stock markets dropped after minutes from the US Federal Reserve's latest meeting released showed that some members expressed concerns over the US central bank's monetary-easing program. Key benchmark indices in UK, France and Germany were off 1.75 to 2.01 per cent.

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