MUMBAI: A Wall Street biggie who was recently in news, a Singapore-based fund managed by an Indian, and a clutch of veteran Kolkata brokers were among the prominent sellers who pushed the Sensex below 13,000, a level last seen 14 months ago.
While the US investment bank in question, which has been in trouble, continued to unwind its participatory note positions, the buzz is that three Kolkata brokers, fronting for a disgraced market operator, failed to meet their margin requirements.
Dalal Street operators, already bogged down by a barrage of negative news, sold stocks as they got a whiff of these developments. Emboldened bears tried to aggravate the panic by hammering down select stocks, like Wipro, that have a sizeable weightage in the Nifty.
While the Sensex plunged 499.92 points or 4% to close at 12,961.68, the 50-share Nifty went below the 4000-mark to close at 3896.75, down 144 points over the previous close. It now appears to be a race to the bottom.
As earnings downgrades fly thick and fast, stalemate over the nuclear deal continues, and crude prices remain stubbornly high, the consensus on the street is that the worst is not over yet. Market participants have been further rattled by the major indices closing below their psychological levels.
The indices have shed over 40% from their record highs, but the damage to individual stocks has been far more severe, many of them have fallen 60-70% from their peaks in January. Some brokerage houses have already put their hiring plans on hold, but the real worry is that many firms will soon start shedding jobs if the market does not stabilise soon.
“We continue to think that valuations in India do not price in the macro risks sufficiently,” said Goldman Sachs in a note to clients. It is a view shared by rival Lehman Brothers.
“Relative to the rest of the world, Asia is still trading at a 24% premium on P/BV (price to book value) and 12% premium on 12-month forward P/E (price earnings). China and India remain the most expensive,” the Lehman Brothers note said.
Sellers continued to target interest rate sensitive sectors. Realty shares continued to top the list of underperformers, with the BSE Realty index shedding 7%. DLF figured among the prominent losers, falling over 7%.
Banking shares too were hammered as the decision to hike lending rates is expected to affect demand for loans. The BSE Bankex fell close to 6%, while the BSE Auto index was down around 5%.
While the US investment bank in question, which has been in trouble, continued to unwind its participatory note positions, the buzz is that three Kolkata brokers, fronting for a disgraced market operator, failed to meet their margin requirements.
Dalal Street operators, already bogged down by a barrage of negative news, sold stocks as they got a whiff of these developments. Emboldened bears tried to aggravate the panic by hammering down select stocks, like Wipro, that have a sizeable weightage in the Nifty.
While the Sensex plunged 499.92 points or 4% to close at 12,961.68, the 50-share Nifty went below the 4000-mark to close at 3896.75, down 144 points over the previous close. It now appears to be a race to the bottom.
As earnings downgrades fly thick and fast, stalemate over the nuclear deal continues, and crude prices remain stubbornly high, the consensus on the street is that the worst is not over yet. Market participants have been further rattled by the major indices closing below their psychological levels.
The indices have shed over 40% from their record highs, but the damage to individual stocks has been far more severe, many of them have fallen 60-70% from their peaks in January. Some brokerage houses have already put their hiring plans on hold, but the real worry is that many firms will soon start shedding jobs if the market does not stabilise soon.
“We continue to think that valuations in India do not price in the macro risks sufficiently,” said Goldman Sachs in a note to clients. It is a view shared by rival Lehman Brothers.
“Relative to the rest of the world, Asia is still trading at a 24% premium on P/BV (price to book value) and 12% premium on 12-month forward P/E (price earnings). China and India remain the most expensive,” the Lehman Brothers note said.
Sellers continued to target interest rate sensitive sectors. Realty shares continued to top the list of underperformers, with the BSE Realty index shedding 7%. DLF figured among the prominent losers, falling over 7%.
Banking shares too were hammered as the decision to hike lending rates is expected to affect demand for loans. The BSE Bankex fell close to 6%, while the BSE Auto index was down around 5%.
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