It was a trading day that investors will take a long time to forget. Fears of recession in the U.S becoming a reality saw global indices tumble. The worst to get affected in this mayhem was the Indian market. The bears went berserk on Dalal Street creating panic to such an extent that trading in Bombay Stock Exchange’s benchmark Sensex was halted briefly. The moment trading resumed, the index recovered some of the lost ground. According to dealers, “government funds are trying to bring in some stability to the already crumbling market.”Sensex saw the biggest absolute fall in history by falling 2062 points intra-day. It closed at 17,605.35, down by 1408.35 points or 7.4 per cent. It fell to a low of 16,951.50. National Stock Exchange’s Nifty plummeted 8.7 per cent or 497 points to close at 5208.80. It slumped to a low of 4977.10. NTPC, down 15.07%, was the worst hit, followed by Reliance Energy (down 14.79%), ACC (14.53%), ACC (14.53%), Reliance Communications (13.84%), Grasim Industries (13.19%) and DLF (9.62%), to name a few blue chip giants. Bucking the trend, Satyam Computer posted nearly 5 per cent gains after the IT major reported a 29 per cent rise in consolidated third-quarter net profit on continued growth in sales. It said that it expects a 45-45.2 per cent increase in revenue growth in 2008 over 2007. The company’s net profit for its fiscal third quarter ended December 31 rose to Rs.434 crore from Rs.337 crore reported a year earlier.
On the other side, Prime Minister Manmohan Singh said that he was confident the Indian stock market would grow in an orderly manner despite a vicious sell off on Monday. “Let me say orderly growth of the capital market is a priority concern for our government,” Singh said.
A sharp fall in the stock market on Monday was triggered by uncertainties in the global economy and was, in no way, related to any change in India’s economic fundamentals, the government said on Monday.“The fundamentals in the domestic economy are quite strong. Today’s market fall reflects the continuing uncertainties in the global economy and not any change in the fundamentals of the Indian economy,” the government said in a statement. Monday’s huge fall of the sensitive index (Sensex) of the Bombay Stock Exchange was a correction. And it was a good thing to have happened feel some of the financial experts. The large market capitalization of shares of a power company was not justified. From this perspective, the fall is a correction and a good thing to have happened.Though the fall has left many retail investors stunned, they were optimistic that the outlook would change for the better on Tuesday.A cross section of people who trade in stocks said they refrained from selling despite Sensex’s fall by 7.4 percent. They were confident of the market bouncing back. Most of them have not bought any shares but have not sold any either and have opted to ‘wait and watch’.However, one can’t be certain about the outlook on Tuesday. There is a big build-up of derivatives. Unless these are squared up at least up to 30 or 40 percent, there can be sideways movement and even a fall. The situation was pretty grim, but if the market opens at 400 to 450 points above Monday’s level, it would be on a recovery path. If the market opens weak, then there could be a selling pressure on Tuesday. So do play with the bulls…but with a red cloth in your hands!Saurabh Sharma