Sensex ends 189 points lower on profit booking across globe
11 May 2010
The benchmark Sensex shed 189 points on profit booking across the globe, which reacted to concerns over implementation of USD one trillion package announced by EU/IMF on Monday. Almost all sectors witnessed selling pressure - metal, realty, infrastructure and oil & gas, which rallied sharply, were the major ones.
European Union along with International Monetary Fund had declared USD 1 trillion bailout package to stop rising Greece's debt crisis from spreading to other Eurozone as well as other regions of globe. All markets cheered to this news on Monday. However, all markets rollback some of their yesterday's gains on doubts over implementation of this package properly.
Mark Mobius, Chairman, Templeton Asset Management, doesn't see these measures solving the long-term problem. "It is a short-term sort of band-aid, but it will not solve the longer-term problem. We can expect more and more volatility going forward in these markets."
The International Monetary Fund said that even though Greece's public debt was sustainable over the medium term, the nation whose debt woes spurred the unprecedented euro zone action faced plenty of risks. Moody's credit ratings agency also warned it might downgrade Portugal's debt rating and further cut Greece's to junk status, noting the contagion effect of Greece's crisis on other euro zone members.
European markets like CAC, DAX and FTSE declined 1-2%, at the time of closing of Indian equities. The US index futures were down 1% each, which indicates lower opening for US markets today. Asian markets tanked in the second half of trade, Shanghai lost 1.9%. Hang Seng, Jakarta and Nikkei lost 1.1-1.4%. Straits Times, Kospi and Taiwan fell 0.4-0.8%.
Even Euro also declined against Japan's Yen and US dollar. Crude lost 1% to USD 76 a barrel while Gold in the international markets gained 0.7% at USD 1210 an ounce.
