Greece woes spook markets, Sensex closes 255 points down
08 Apr 2010
The benchmark Sensex witnessed a sharp correction today for the first time since the last two months, on the back of rising worries in Greece region and ahead of the BoE and ECB meeting. The Nifty also broke the 5300 mark in intraday trade as selling was seen across sectors barring technology and realty.
Greece Credit Default Swaps (CDSs) surpassed Iceland for the first time since 2005; CDS on Greece bonds jumped to 415 bps from 390 bps. CDS is the cost of insuring government debt. Yield on 10-year Greek government bonds jumped to a new 11-year high.
Athex Composite Share Price Index was down over 4% post this news. Even CAC 40 Index slipped 1.6%; DAX and FTSE 100 declined 1.2% each. European Central Bank and Bank of England meeting will be held today on interest rates. The market is expecting that the European Central Bank Jean-Claude Trichet may announce changes to the collateral the central bank accepts for loans as it looks to support Greece.
Asian markets also tumbled on profit booking. Nikkei, Shanghai, Straits Times and Taiwan indices were down 0.8-1%. Hang Seng was down 0.3% while Kospi gained 0.4%. The US index futures were trading marginally lower, at the time of closing of Indian equities.
The 30-share BSE Sensex closed at 17,714.40, down 255.62 points or 1.42% and the 50-share NSE Nifty fell 1.31% or 70.20 points to 5,304.45, after hitting intraday low of 17,679.34 and 5,290.25, respectively.
On the sectoral front, the BSE Oil & Gas, Metal, Bank, Auto and Capital Goods indices slipped 1-1.9%. However, Realty Index was up 0.55% and IT up 0.34%.