Sensex registers second worst fall in 20 yrs

Sensex registers second worst fall in 20 yrs

Monday, 02 April 2007, 05:00 Hrs
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Mumbai: Indian shares crashed and a leading index fell by more than 4.71 percent - its second biggest single-day fall in history - following the central bank's stern measures to contain inflation.

The Reserve Bank of India (RBI) had increased its short-term lending rates to banks by 25 basis points on Friday. As the policy announcement came after the markets closed, a reaction was expected, but the intensity of the fall took market players by surprise.

The Sensitive Index ('Sensex'), the benchmark 30-share sensitive index of the Bombay Stock Exchange (BSE), was down 616.73 points or 4.71 percent at 12,455.37. This was the second most miserable in absolute value terms in the over 20-year history of the benchmark Sensex. The second biggest fall in percentage terms was recorded on 17 May 2004 when Sensex dropped by 565 points (11.14%) to close at 4,505 after the NDA lost out to make way for UPA coalition at the Centre.

The broader 50-issue National Stock Exchange (NSE) index, Nifty, was down 187.95 points or 4.92 percent at 3,633.60.

Only six index shares managed to close in the green as stocks of most sectors led by banking were hammered down. "RBI's rate decision had a negative impact on the market early Monday. It took investors by surprise because there was some kind of market stability at least for the next few months. But I think the market will level at 12,300 mark in the coming sessions," said analyst Jayash Shroff.

By close of trading, top public sector lender State Bank of India was down 6.31 points at 930.25, top private lender ICICI Bank - which raised its benchmark lending rate by 100 basis points to 15.75 percent effective from April 1 - was down 5.70 percent at 804.50 and the second largest private lender HDFC Bank was down 5.03 percent at 901.60.

IT and auto shares too were hard hit with state-run carmaker Maruti Udyog leading the major index losers, down 8.09 percent at 753.40. It was followed by top utility vehicle maker Tata Motors, down 8.04 percent at 669.25 and third largest software exporter Wipro, down 7.18 percent at 515.00.

Index heavyweights like top two-wheeler maker Hero Honda Motors, leading engineering and construction firm Larsen & Toubro, top housing finance company HDFC, state-owned oil and natural gas explorer ONGC and top private steel producer Tata Steel were among the other major losers of the day.

IT majors like top software exporter Infosys Technologies and telecom majors like Bharti Airtel too traded in the red.

Sugar producer Balarampur Chinni led the gainers, up 2.05 percent, followed by Bajaj Hind, up at 197.60 and leading zinc and lead producer Hindustan Zinc, up 1.06 at 569.30. Top consumer food maker Nestle and consumer goods maker Colgate Palmolive were among the six index shares that traded in the green.
Source: IANS
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