Sensex joins Asian sell-off, slides 5 percent on global recession fears
20 Nov 2008, 1638 Hrs

This was its lowest since October 27, when it touched a three-year low of 7,697.39

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Mumbai, Nov 20 The Bombay Stock Exchange (BSE)'s Sensitive Index (Sensex) tumbled more than five per cent on Thursday, led by losses in top-listed Reliance Industries and financial stocks, joining the rest of Asia in a broad sell-off after U.S. markets plunged.

By noon, the 30-share BSE index was down five per cent at 8,335.02, after falling as low as 8,316.39.

This was its lowest since October 27, when it touched a three-year low of 7,697.39.

The 50-share National Stock Exchange (NSE) index was down 4.33 per cent at 2,520.90.

Later, at 2:30 p.m., sensex was at 8396, down by 376 points or 4.30 per cent.

Traders said they were hoping for a rate cut by the Reserve Bank over the next few days, their expectations fuelled by falling inflation.

Experts say that with the US Federal Reserve slashing the growth forecasts through 2009 and with chances of even deeper interest rate cuts, fears of a further slowdown are sinking in.

"This is the seventh straight day that the index is on a losing street and that too more than 300 points. This is something, which is unusual but these are unusual times and on Wednesday we saw US market tanking by 400 points because now they fear that the Fed (Federal Reserve) expectation of the US Gross Domestic Product (GDP) to be negative and today the Asian markets were also down. So I think (in view of) these problems and these kinds of recessionary situations it seems (this situation) will remain longer than what originally people had thought," said Sunil Shah, a market expert.

Private-sector lender ICICI Bank fell 7.1 per cent, while HDFC Bank lost 6.2 per cent and mortgage lender Housing Development Finance Corp eased 5.8 per cent as financial stocks extended losses on fresh fears of rising defaults.

Reliance Industries, with the maximum weightage in the index, fell 5.2 per cent to 1,072.90 rupees, extending its losses this year to 63 per cent.

Meanwhile, software exporters fell as the slowdown in key U.S. and European markets raised revenue concerns.

India's annual inflation rate for the week to November 8 fell to 8.90 per cent, marginally below the previous weeks annual rate of 8.98 per cent.

The benchmark index has been one of Asia's worst performers this year losing more than 58 per cent. All of its components fell on Thursday, while in the broader market 1,614 losers outpaced.

Big falls in the United States and bad news from Japan spooked Asian markets. U.S. shares fell to five and a half year lows after the Federal Reserve slashed its economic growth forecasts for 2009.

Japan reported its exports posted their biggest annual decline in seven years in October. (ANI)