Mumbai: Local and global factors combined on Thursday to reverse the 4-day winning streak of the sensex as the BSE benchmark index closed 256 points lower at 17,714. The 1.4% fall in the sensex was its biggest single-session loss in about two months. The loss also came a day after the sensex went above the 18K mark, after a gap of over two years.
Of the 30 sensex stocks, 26 ended in the red, while investors were left poorer by Rs 76,000 crore with BSE's market capitalisation now at Rs 62.4 lakh crore.
On Thursday, a sudden and huge surge in food price inflation made investors jittery as they felt RBI will certainly raise rates in its policy meeting on April 25. During the day, the government said that the annual food price inflation for the week ended March 27 was at 17.7%, up from 16.35% the previous week. Market players said the central bank will now surely raise key policy rates to rein in the galloping inflation.
On the global front, the deepening of the economic crisis in Greece pulled down markets across the world. Greek bonds and banking stocks were pummelled on Thursday, that drove the debtridden country's borrowing costs to new highs. This also pushed Greece closer to a situation where it would need to tap a EU-IMF bailout fund. A government assurance to the contrary was not of much help, news reports said.
Around the world, Nikkei in Japan ended 1.1% off, Hang Seng in Hong Kong was down just 0.3%, while in Europe FTSE ended 0.9% off. In midsession trades, the Dow Jones Index in the US was down marginally.
During the day, Dalal Street picked up the global cues and sold heavily with oil & gas, metals and banking leading the slide. Among the frontline stocks, Hindalco ended 4.3% off at Rs 176, HDFC was down 3% to Rs 2,725 and ICICI Bank lost 2.7% at Rs 961. A section of the market players, however, see this slide as a good opportunity for correction in the sensex after four winning sessions when it added 442 points.
In the forex market, the Indian rupee ended 8 paise higher against the dollar at 44.46, from its previous close at 44.54. EU-IMF bailout may be only way out for Greece
Athens: Markets pounded Greek bonds and banking stocks on Thursday, driving the debt-stricken euro zone member's borrowing costs to new highs and pushing it closer to tapping a last resort EU/IMF safety net.
The government struggled to reassure markets it can stay solvent after the premium investors demand to buy Greek rather than the benchmark German government debt surged for the third day in a row to a record high since Greece joined the euro.
But scepticism at a dearth of details surrounding the European Union and International Monetary Fund lifeline continued to pile pressure on a country already struggling to cover its wide fiscal gap and huge public debt load.
Chris Pryce, senior Greece analyst for rating agency Fitch, said Athens' only choice now was to ask for help. "Despite everything the EU and the euro zone have done there is still a lack of clarity (and) confusion about what they intend to do, when they intend do it and how much would be involved," he said. "It is now up to the Greek government to go publicly to the EU and IMF and ask for the cash and the support."
The government has pledged to cut its public finance deficit by almost one third to 8.7% of gross domestic product this year, but is also wary of sparking public unrest after a string of riots and strikes since last year.
Reluctant to give in to the pressures, Greece insists it prefers to borrow from markets and will use the European Union/International Monetary Fund safety net agreed only as a last resort, a call it repeated on Thursday.
"For the time being it is not necessary to activate the aid mechanism. The EU/IMF safety net is there to guarantee that Greece is not alone," said spokesman George Petalotis, adding Athens was striving not to borrow at "barbaric" interest rates. But the 10-year Greek/German government yield spread spiked almost half a percentage point to as much as 463 basis points on Thursday. Two-year Greek government bond yields surged more than 100 bps to almost 8%. REUTERS
No comments:
Post a Comment