Sensex rebounds after sharp losses, still down by 223 pts

Sensex rebounds after sharp losses, still down by 223 pts

 Continuing its overnight sharp losses, the Bombay Stock Exchange benchmark Sensex opened lower and in a knee-jerk reaction to Dubai debt repayment crisis further posted a sharp over 600-point losses on aggressive selling, primarily in realty and banking counters.

However, the trend was quickly reversed after the government said the crisis should not have any major impact on factors like employment and exports, which boosted the investor confidence. The Reserve Bank also said developments and the extent of the problem need to be studied which also boosted the confidence.

Marketmen said the impact of Dubai crisis on bourses, especially in India, would be short-lived as the exposure of the India and Indian corporate to Dubai is not significant.

"It is unlikely to deter the liquidity flows towards the Indian bourses, which provides the global investors an exposure to the high growth and profitability destination. Hence, investors should use the opportunity provided from the knee-jerk reaction of the markets to enhance exposure to equities," said Angel Broking CMD Dinesh Thakkar.

The finance ministry said the financial crisis in Dubai may not impact remittances sent by Indian expatriates in the Gulf, helping reversing the trend.

Brokers said buying by domestic funds, led by Life Insurance Corporation at the end of the session, mainly arrested further fall.

The Bombay Stock Exchange 30-share Sensex finally settled the day at at 16,632.01, netting a fall of 222.92 points or 1.32 per cent from its previous close.

Bourses across the world plummeted yesterday on Dubai World, a state-run company seeking extension of time for repaying USD 59 billion to creditors.

Asian stocks extended losses as the latest concern has triggered worries about the health of global financial system. Key benchmark indices in China, Hong Kong, Singapore, Japan, South Korea and Taiwan ended sharply lower by between 1.10 per cent to 4.84 per cent.

The broader 50-share Nifty of the National Stock Exchange dropped further by 63.80 points or 1.27 per cent to close at 4,941.75 from its last close.

Among the Sensex stocks, Jai Prakesh Associates fell by 3.05 per cent, engineering major Larsen & Toubro by 2.71 per cent, IT giant Infosys by 2.45 per cent, TCS by 2.40 per cent, Sterlite Industries by 2.13 per cent and ITC by 1.88 per cent.

The country's largest private lender ICICI Bank declined by 1.65 per cent, while HDFC fell by 1.87 per cent. The heavyweight Reliance Industries dropped by 1.47 per cent, NTPC by 1.19 per cent, Reliance Comm by 1.18 per cent, Wipro by 1.15 per cent and realty major DLF by 1.03 per cent.

The BSE-IT index dropped by 104.85 points or 2.20 per cent, the BSE-Capital Goods index by 243.08 points or 1.82 per cent, the BSE-Metal index by 207.48 points or 1.30 per cent and the BSE-Bankex by 141.43 points or 1.41 per cent.

The smallcap and the midcap indices fell by 161.12 points or 2.14 pct and 86.27 points or 1.35 per cent respectively.

The market breadth was extremely weak as 2,023 shares ended with losses and 735 registered gains.

Trading volume was higher at Rs 5,353.31 crore compared to Rs 4,507.67 crore on Thursday. Tata Steel clocked the day's highest turnover of Rs 249.12 crore followed by HDIL (Rs 207.68 crore), Suzlon Energy (Rs 194.64 crore), SBI (Rs 187.94 crore) and Reliance Industries (Rs 176.36 crore).