On Friday the Indian bourses mirrored the fall in the fall in the global markets which were gripped by fears of a double dip recession in US and a liquidity crunch in the Euro Zone.
The Sensex plunged 700 points were while the Nifty fell by as much as 205 points in intraday trade.
120.55 points or 2.26 percent to close the day at 5211.25 points were lost by NSE, while the BSE lost 2.19 percent or 387.31 points to close at 17305.87 points.
It was stated by Mr. Jagannadham Thunuguntla, Strategist and Head Research SMC Global, that there have only been 10 times in the history of US markets when the Dow has fallen by 500 points in a single day.
So according to him it was clear that for this time as well the market would react sharply and decline.
All indices on BSE and NSE fell sharply and the only saving grace was the V shaped intraday recovery for the Sensex and the Nifty at close as the final erosion was nearly equal to the gap down opening in the morning.
Dr. Nirakar Pradhan, CIO- Future Generali Life Insurance said that the people are reacting by either not buying or booking profits. And some of them are even booking losses as they feel something is better than nothing.
On Friday, FIIs sold equities for a net of Rs. 1788.96 crore. It was DII buying which started the recovery in afternoon trade; they bought equity for a net of Rs. 1372.40 crore.
According to Mr. Motilal Oswal, Chairman and Managing Director, Motilal Oswal Financial Services, it is a minor hiccup and is more of a sentimental impact as FIIs is withdrawing money. He also stated that they have got a global-investor dominant market.
The retail investors turned buyers; on the BSE they bought net equity worth Rs. 146.1crore.
On Friday the entire trading session was so volatile that the volatility indicator India VIX rose 23.15 percent to close at 24.90 oints.
The Nifty had an advance decline ratio of 6:44 with BPCL, Hindalco, ONGC, Cipla, IDFC and Jindal Steel the only gainers while the Sensex had an advance decline ration of 3:27, with only Hindalco, ONGC, Cipla closing Friday on a positive note.
According to Mr. Nirmal Jain, Chairman IIFL, the markets would consolidate with a negative bias.
News report By, SM
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