Sensex ends 111 points down despite great recovery attempt

A handsome recovery from lowest point of the day could not save the market from registering its third consecutive session of loss on Monday. While short covering and a rebound in global markets drove the recovery in the last couple of hours of trade, a steep cut in oil & gas, capital goods, metals, FMCG, power and auto stocks forced a negative closure. A drastic fall in international commodity price too weighed on the market today.

The 30-share BSE Sensex fell 110.96 points or 0.69%, to close at 16051.10 after seeing recovery of 250 points from day's low of 15,801.01. The 50-share NSE Nifty hit an intra-day low of 4,758.85, before closing at 4,835.40, down 32.35 points or 0.66%.

Billionaire investor Rakesh Jhunjhunwala believes the market should not drop more than 10% from current levels. "The near-term expectations are that it [Nifty] will not break the last bottom, which was around 4700-4750," he reiterated.

According to him, two things might work in favour of Indian market. "We have had a good monsoon and the commodity prices have come down dramatically," he said adding, "…if the inflation can be tackled or corrected, which it could if the commodity prices come down, then I think we will see peaking of the interest rate cycle. And if interest rates come down, India will do very well."

He feels the Indian market is well poised at the moment and investors should capitalise on the investment opportunity.

Robert Parker, VC of Credit Suisse Asset Management too said, equity markets globally, by any criteria- forward price earnings, price to book ratio, EPS ratios, dividend yields- seem to be cheap relative to history and relative to other asset classes and most significantly relative to fixed income markets.