Nifty ends at 3-month low on global carnage

25 May 2010

The benchmark Nifty has taken huge beating on Tuesday following sell-off across the globe, which reacted to Eurozone debt worries and rising geopolitical tensions in Korea. Index broke the psychological 4800 mark while the Sensex slipped below 16000 level in an intraday trade, for the first time since February 16 and February 11, respectively.

World and emerging markets touched their lowest levels since September 2009. Sharp cut in banking and commodities put pressure on the European markets; CAC, DAX and FTSE were down 2.6-3%, at the time of closing of Indian equities. Euro dipped 0.84% to 1.22 against US dollar and Crude oil futures fell USD 2.6 to USD 67.7 a barrel.

Spain's central bank took control of regional savings outfit CajaSur after board refused a merger plan; this news reminded investors that the world is only just recovering from a banking crisis, following weeks of anxiety over how to stop a debt crisis begun in Greece from deepening. The bank reported loss of USD 749 million in 2009.

Another concern - North Korean leader Kim Jong-il has told his military the country may have to go to war if the South attacks, with angry rhetoric on both sides having stepped up in recent weeks. Asian markets ended 2-3.5% lower post this news.

Global stocks as measured by MSCI fell 1.6% to their lowest since early September 2009. The Dow and Nasdaq futures lost over 2%.

The 30-share BSE Sensex closed at 16,022.48, down 447.07 points or 2.71% and the 50-share NSE shed 137.20 points or 2.78% to settle at 4,806.75, after hitting day's low of 15,960.15 and 4,786.45, respectively. The broader indices lost 3-3.4%.