Home > Our Country > AGAIN Sensex pares some losses as RBI cuts CRR

AGAIN Sensex pares some losses as RBI cuts CRR

Indian markets recovered partly from the early lows after the Reserve Bank of India cut the cash reserve ratio by an unprecedented 150 basis points. The Sensex was down over 700 points, or 6.2 per cent, after plunging by 1,088 points at its intraday low.

The Nifty was down over 5.5 per cent to 3,300 levels. Sensex pares some losses as RBI cuts CRR

The CRR cut would release Rs 60,000 crore into the Indian financial system.

The consumer durables stocks were the worst sufferer in the carnage on the BSE. The index on the BSE was down over 7.8 per cent. The other sectors that saw huge losses were capital goods, realty and IT stocks are down 6.6 per cent to 7.5 per cent.

Among the Sensex stocks, ICICI Bank led the losers, down over 11.8 per cent. Rel Comm, Bharti Airtel, Tata Steel and BHEL were down 8.1 per cent to 10.5 per cent.

A massive sell-off on Wall Street and an escalating global equity crisis sent Asian stocks plunging Friday, with Japan’s benchmark Nikkei 225 index tumbling more than 10 per cent.

“Selling is unstoppable in New York and Tokyo,” said Yutaka Miura, senior strategist at Shinko Securities Co. Ltd. in Tokyo. “Investors were gripped by fear.”

Hong Kong’s Hang Seng index tumbled more than 8 per cent, South Korea’s Kospi shed 7.4 per cent, Shanghai’s benchmark fell 4.1 per cent, and Singapore’s Straits Times index was off 7.0 per cent. In Syndey, Australia’s S&P/ASX200 was down 6.8 per cent.

Friday’s regional declines follow a 7.3 per cent plunge in the Dow Jones industrial average Thursday to close below the 9,000-line for the first time in five years. Stocks nose-dived after a major credit-rating agency said it might cut its rating on General Motors Corp. and Ford Motor Co., further rattling investors already fretting over the impact of tight credit on the economy.

Infosys on Friday announced a better-than-expected net profit for its second quarter, although it cut its guidance for the full year. The IT bellwether said its net went up by 9.9 per cent to Rs1,432 crore, from Rs 1,302 crore a quarter earlier.  However, its income numbers were in line with expectations. Its revenues inched advanced 11.6 per cent to Rs 5,143 crore, from Rs 4,854 crore a quarter earlier.  The Bangalore company cuts its FY09 revenue by 5 per cent to $4.72 billion to $ 4.81 billion. The stocks was down over 6.6 per cent to Rs 1,178.

Infosys results are sort of bellwether for corporate health and other software companies.

“The Infosys’s 5 per cent cut in guidance is a disappointment for the markets,” said Pankaj Pandey, head of research at ICICI Securities. (With Agency Inputs)

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