Sensex ends 150 pts lower on global sell-off post Fed meet

11 Aug 2010

The benchmark Sensex shed 150 points on sell-off across the globe post FOMC announcement. Financial and metal companies' shares were leading the losers followed by technology, capital goods, power and realty shares. Heavyweights Reliance Industries, ITC and Bharti were among the other losers.

However, rally in Tata Motors post strong numbers along with uptrend in JSPL, GAIL, ONGC, HUL, Hindalco, Idea Cellular, Ambuja Cements and Tata Power limited the losses to some extent.

Global markets witnessed selling pressure barring Shanghai, especially after Federal Open Market Committee announcement; measures of US Federal Reserve for economic recovery failed to create optimism in markets.

Fed said, "To help support the economic recovery in a context of price stability, the Committee will keep constant the Federal Reserve's holdings of securities at their current level by reinvesting principal payments from agency debt and agency mortgage-backed securities in longer-term Treasury securities. The Committee will continue to roll over the Federal Reserve's holdings of Treasury securities as they mature."

"The Committee will maintain the target range for the federal funds rate at 0 to 1/4% and continues to anticipate that economic conditions, including low rates of resource utilization, subdued inflation trends, and stable inflation expectations, are likely to warrant exceptionally low levels of the federal funds rate for an extended period," according to FOMC.

European markets like France's CAC, Germany's DAX and Britain's FTSE were trading 1.7% lower; even the Dow Jones and Nasdaq futures were down 1.4% each, at the time of closing of Indian equities. Asian markets like Hang Seng, Straits Times, Kospi and Taiwan were down 0.8-1.3%. Nikkei lost 2.7% while Shanghai gained 0.5%.