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US credit crisis bleeds Indian markets
Published on Mon, Sep 15, 2008 at 19:30 in 
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Mumbai: It was a sharp cut in Indian equities along with global markets through the day as endless credit crisis in the US financial space worries markets globally.
Rate sensitives, infrastructure, oil and technology stocks witnessed huge selling pressure followed by midcap and small cap stocks. Benchmark indices crashed severely on huge volumes. But some recovery was seen in last one hour of trade led by auto and banking stocks.
Bears have been playing their role for fifth consecutive day and kept bulls under control.
Financial woes are still active in the US financial space. The news of Lehman Brothers filed Chapter 11 bankruptcy has played a big role in today's session, which is one of the most reputed financial firm in the US.
This news has walloped Asian and European markets as well. US markets are likely to open lower, say experts.
Lehman Brothers says no broker-dealer subsidiaries to be included in bankruptcy filing and the company is exploring sale of its broker-dealer operations. Bank of America and Barclays had showed an interest in the Lehman Brothers but backed out.
Ramesh Damani feels that global markets will go through painful adjustment period.
Kirby Daley of New Edge Group sees outflows from emerging markets, including India. He expects a lot of action from the Fed and the US government to keep the situation under control and expects global retrenchments.
Indian benchmark indices were slaughtered severely after this news; the Sensex lost 850 points and the Nifty fell 273 points to hit an intraday low of 13,150.81 and 3955.40, respectively. The Sensex closed with a loss of 469.54 or 3.35 per cent at 13,531.27 and the Nifty fell 155.55 points or 3.68 per cent, to settle at 4072.90.
Some buying in auto and banking stocks has helped markets a bit in last one hour of trade. Both indices recovered nearly 380 points and 117.5 points, respectively.
This recovery might be because of Crude, which touched $96 to a barrel and China has cut its lending rates by 27 basis points from September 16, which also cuts its reserve requirements for small banks by one per cent.
Among the frontliners, Reliance Infrastructure went down by 9.72 per cent, Satyam -9.45 per cent, Ranbaxy Labs -7.60 per cent, Unitech -7.69 per cent, Tata Communication -7.46 per cent, DLF -7.54 per cent and Jaiprakash Associates -6.51 per cent. However, Maruti Suzuki, HDFC, BPCL and ACC were only gainers in the benchmark indices.
BSE Midcap index crashed by 248.55 points or 4.49 per cent to 5,288.59 and Small Cap Index fell 331.07 points or 4.93 per cent, to settle at 6,380.47. Among midcap stocks, Indiabulls Securities, Anant Raj Ind, Mercator Lines, Ansal Properties, Orbit Corporation, MIC Electronics, Dish TV India and IFCI lost 11-13 per cent.
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