Mumbai: Visible recovery in the last hours before equity indices closed for the day (and week) may have rekindled hopes of several bruised investors and traders. The Nifty, which was at a 52-week low, managed to end the day at 5,211, down 120.55 points, led by bottom fishing and technical pullback.
Benchmark BSE Sensex fell over 700 points in intra-day trade on the back of sell-off across the globe on fears that the US may get back into recession again. Major US indices Dow Jones, NASDAQ Composite and S&P 500 tumbled between 4 per cent and 5 per cent on Thursday.
Dharmesh Mehta of Enam Securities said the sell-off was more technical rather than fundamental. "We are seeing reduction in exposure to emerging markets including India," he said.
Mark Matthews of Julius Baer feels that the next few days will be critical for global markets. The US markets plunged sharply, with the Dow down more than 500 points, in its worst one-day drop since December 2008. "There could be further global correction due to sentiment damage," he said.
However, some recovery in the European markets and US index futures turned good for the Indian markets in the last couple of trade. France's CAC, Germany's DAX and Britain's FTSE, which were down more than 3 per cent in initial trade, were down 1-2.5 per cent at the time of closing of Indian equities. US index futures - Dow Jones and Nasdaq fell just 0.5-1 per cent.
Even Hang Seng, which was down more than 5 per cent in late trade, closed 4 per cent lower. Other Asian markets fell 2-3.7 per cent. Only Taiwan hit hard - lost 5.6 per cent.
Investors as well as traders globally may be betting on US payroll and employment numbers to be declared today.
But, the expectations are not very high from the US payroll data, said Arjuna Mahendran of HSBC Private. "A possible downward revision of the US GDP has worried the street," he said.
The 30-share BSE Sensex fell 384.31 points or 2.19 per cent, to close at 17,305.87 after seeing recovery of 315 points from day's low.
Portfolio manager PN Vijay says that today maybe the 'last tough day' for investors. "I see some resolution, going forward from today’s mayhem," he says.
He sees no impact on India’s macro aspects, compared to other emerging markets like Korea or Taiwan, as we are not dependent on Europe and US demand.
Even Amit Dalal of Tata Investment Corporation feels that Indian economy is likely to benefit from the global turmoil in the long-term. "All the factors, which fundamentally would affect our earnings, are smoothening down with this particular crisis overseas, except of course, recession worldwide leads to lower exports," he felt.
Technology stocks saw the major fall due to US recession fears as they export software services. BSE IT Index, which was down 5.5 per cent in intra-day trade, fell 4 per cent at close.
HCL Tech plunged over 5 per cent. TCS, Infosys and Wipro slipped 2-4 per cent.
Among others, the BSE Realty, Power, Metal, Auto, Bank, Capital Goods, FMCG, Oil & Gas and Healthcare indices were down between 1 per cent and 3 per cent.
Heavyweights like NTPC, BHEL, Reliance Industries, Bharti Airtel, ICICI Bank, ITC and HDFC lost 2-4 per cent.
Reliance Infrastructure and Reliance Communications were top losers on Nifty, falling over 7 per cent. Sterlite Industries crashed over 6 per cent.
Cairn India was the biggest loser among oil & gas stocks after fall in crude oil prices to USD 85 a barrel on NYMEX. The stock tumbled 6.8 per cent.
However, oil marketing companies HPCL and BPCL gained 2-2.6 per cent on crude fall. IOC went up just 0.8 per cent. ONGC too bucked the trend on hopes that the subsidy sharing burden may be less; the stock gained 1.4 per cent.
Nirmal Jain of IIFL said cooling down of crude prices will be positive news for the market. "Whenever the dust settles, we will see some good institutional money coming back to the market," he said.
Hindalco and Cipla were up 0.5-1 per cent.
About 583 shares advanced as against 2383 shares declined on the BSE. Total traded turnover was more than Rs 2.2 lakh crore.
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