Markets shock on rising oil; Sensex, Nifty end down 4 per cent

03 July 2008

Markets have completely washed out all indices in an intraday trade though some recovery has happened in late trade, which seemed like value buying at lower levels. Weak global cues on the back of rising crude have worrisome effect on our markets as well. Sensex and Nifty again test 13000 and 3900 levels, respectively in today's session. Realty, metal, banking, power, telecom, auto and capital goods stocks slaughtered severely.

Markets sources say that intraday recovery was largely on back of short covering. However, political uncertainty is keeping investors wary of putting fresh money in the markets. Redemption led sell off by hedge funds continued. Selling pressure will continue in midcap and small cap stocks.

Dealers feel that redemption pressure in domestic funds could be the last leg of capitulation.

The Sensex has touched an intraday low of 12,934.92, down 729.7 points or 5.34% over its previous close. It was down 570.51 points or 4.18% at 13,094.11.

Nifty Fifty crashed 218.5 points or 5.34% while hitting an intraday low of 3874.85. It finished at 3925.75, down 167.6 points or 4.09%.

Technical analyst said Nifty support is at 3850 in near term and the worst is not over yet.