MUMBAI: Stocks are headed for a bleak opening on Thursday with deepening worries over a prolonged global economic recession spurring a huge sell-off across global markets.
US stocks plunged the most since the crash of 1987 on Wednesday, after the Federal Reserve said economic activity weakened across the United States in September as businesses rethought capital investments, and consumers curtailed spending. Stocks had already been sharply lower as investors worried that global efforts to unlock credit markets would not prevent recession and Fed Chairman Ben Bernanke acknowledged the US economy faced a significant threat. The Standard & Poor's 500 Index sank 90.17 points, or 9 per cent, to 907.84, with nine companies declining more than 20 percent. The Dow Jones Industrial Average retreated 733.08, or 7.9 per cent, to 8,577.91, its second-biggest point drop ever. The Nasdaq Composite Index lost 150.68, or 8.5 per cent, to 1,628.33. It was a disastrous picture across Asian markets, which slumped on global recession concerns. The Nikkei plunged 7 per cent, Hang Seng lost 7.2 per cent, Straits Times shed 6.36 per cent and S&P/ASX fell 6.41 per cent. Back home, the Reserve Bank of India slashed its cash reserve requirement for banks for the second time in a week on Wednesday, releasing Rs 40000 crore into the banking system to boost liquidity. At the same time, it would release Rs 25000 crore to banks for a farm loan waiver scheme, and the government doubled the cap on foreign investment in corporate debt to $6 billion from $3 billion as authorities sought to get money flowing through squeezed markets. However, the positive reaction from these measures may be eclipsed given the bearish sentiment across global markets. The Indian rupee is expected to drop steeply on Thursday as sharp falls in overseas share markets could speed up foreign fund outflows, although the central bank may intervene to stem a rapid fall. On Wednesday, Bombay Stock Exchange's Sensex closed at 10,809.12, down 674.28 points or 5.87 per cent. It gyrated between a low of 10,760.33 and high of 11,257.15 intraday. National Stock Exchange's Nifty ended at 3338.40, down 5.12 per cent or 180.25 points. The broader index touched a low of 3,324.55 and a high of 3,518.50. Foreign institutional investors sold off equities worth Rs 1030.79 crore while domestic institutional investors purchased equities valued Rs 669.96 crore on the bourses, according to provisional data on NSE. Ravichandran K. www.kences1.blogspot.com --~--~---------~--~----~------------~-------~--~----~ You received this message because you are subscribed to the Google Groups "Kences1" group. To post to this group, send email to [email protected] To unsubscribe from this group, send email to [EMAIL PROTECTED] For more options, visit this group at http://groups.google.com/group/kences1?hl=en -~----------~----~----~----~------~----~------~--~---
