Indices crash on all round selling
29 March 2005
Fortunately the massive earthquake off the Indonesian coast yesterday did not result in a tsunami, yet a tsunami of sorts hit the Asian markets, which sank without exception. The Indian market was one of the largest losers in the region with losses of more than two per cent. Yesterday's pull back rally was the perfect trap for all those optimists who expected the market to recover.
Such was the fall today that not even a single stock, in the Sensex pack of 30, was trading in the positive territory early in the afternoon. Towards close two stocks from the Sensex (HDFC Bank and Bajaj Auto) and four stocks in the Nifty pack (Colgate, HDFC Bank, GSK Pharma and Sun Pharma) closed with marginal gains. The Sensex closed at 6368, down 143 points and the Nifty at 1984, down 46 points.
The US markets closed on a positive note yesterday even after the news of the earthquake came out. Declining crude prices, news of a large takeover and a technically oversold market led to the positive sentiment. Oil futures fell more than one percent to $54.05 as traders booked profit on easing concerns about lower inventories and supply disruptions.
Most Indian ADR's had a bad day with MTNL, VSNL and ICICI Bank all losing more than two per cent each. Infosys and Tata Motors also registered losses while Satyam, Wipro and Dr. Reddy's closed with gains.
Foreign brokerage firm Morgan Stanley says that Indian corporates would find it increasingly difficult to maintain profitability next year as input costs are rising. It further says a possible rate hike and declining inflows would lead to underperformance by the Indian market as compared to its Asian peers.
The Finance Minister says high crude prices could pull down GDP growth rates by half a percent. He is confident though that the country will be able to manage and added that the current rise is unjustified.