Our Bureau

Mumbai, Oct. 16 The measures announced by the Government and the financial markets regulators to boost investor confidence had no positive impact on Indian equities on Thursday.

The market opened weak on the back of extreme bearish sentiment prevailing across the global markets.

The bellwether Sensex plunged into intra-day low of 10,017, losing 800 points, before recovering to close 227 points down from Wednesday’s close.

Heavy selling by FIIs drove many blue chips to all- time lows, said traders.

The afternoon recovery was supported mainly by domestic institutions which were encouraged by the lower inflation numbers of 11.44 per cent.

The Sensex finally closed at 10,581, falling over 2 per cent, while the Nifty closed at 3269, down by 69 points.

Data submitted by custodians to the exchanges indicated net selling of over Rs 1,160 crore by FIIs in equity, while domestic institutions bought shares worth Rs 737 crore.

“Today we saw huge volatility in the market. HUL, HDFC, SBI and Reliance Communications were supporting the uptrend. But Reliance Industries, which fell 8 per cent, was pulling down the indices,” said Mr Alex Mathew, Head of Research, Geojit Financial Services.

“The lower inflation numbers and reduction in CRR had a positive impact on the banking stocks,” he added.

“Global events have been largely responsible for the recent volatility. India has been impacted primarily due to flight of capital and risk aversion with regard to emerging markets. However, with GDP growth rate in the 7.5-8.0 per cent range, high savings and investment rate along with reserves in excess of $275 billion, India’s macro fundamentals remain very strong,” said Mr Puneet Nanda, Executive Vice-President & Chief Investment Officer, ICICI Prudential Life.

The inter-bank call rates eased as a slew of RBI measures along with the first instalment of farm loan waiver injected close to Rs 1,45,000 crore into the system. The call rates ended substantially lower at 6.75-7 per cent, against the previous close of 9.75-10 per cent. Bond prices also gained by Rs 1.20 as easing liquidity conditions brought cheer to the market. However, the rupee depreciated by 32 paise against the dollar to close at 48.84, tracking the losses in the stock markets.

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