Sensex closes 875 points down on global recession fears

Mumbai/New Delhi, Jan 22 : The 30-share sensitive index (Sensex) of the Bombay Stock Exchange (BSE), on Tuesday, continued its downward trend and plunged by 875 points before closing at 16,729 points.

The National Stock Exchange's (NSE) Nifty closed at 4899, down 309 points from its previous close.

Almost all the scrips in the BSE-30 pack closed in red territory. ONGC, ITC, Hindalco, Mahindra and Mahindra were the key losers.

Top NSE gainers included Nalco, Bharti Airtel and Maruti Suzuki, while losers included Unitech, RPL, ONGC, Tata Power and PNB.

Earlier today, trading was halted at the Bombay Stock Exchange after it fell 9.8 percent within minutes of opening.

Later, it recovered some of its losses, to match its 7.4 percent fall on Monday, which was the Sensex's worst day.

Finance Minister P Chidambaram has urged Indian investors to "remain calm" and advised them to "stay invested".

Chidambaram said that "enough liquidity will be provided to the brokers to tide over the present crisis".

One retail investor said that the market has overreacted to global cues.

"No doubt global markets are down, but it seems Indian markets are overreacting and because of margin tickers, problem is getting really worst. Small investors have to be very careful, especially, small-cap and mid-cap people should be away and should concentrate on quality stocks and if quality stocks are taken, no need of panicking and selling," said Siddhart Kuanwala, a retail investor.

Keeping in mind the investors' sentiments, security has been beefed up in and around the Bombay Stock Exchange.

Arun Purohit, an investor, who had registered losses owing to the fall in the prices at the stock market, resorted to slogan shouting against the ruling Congress party and had to be whisked away by police officials.

Shahina Mukadam, Head Research, IDBI Capital, said: "The impact of the US subprime crisis on the financial sector is having its ripples across the world and selling is happening across global markets. Investors should start investing if not already doing so in the markets at the current levels and should buy fundamentally strong companies."

"Almost all sectors/stocks have corrected and a near term rebound is likely in blue chips in Oil and Gas/Telecom/Banks," Mukadam added.

Most stock market indexes today had a second day of losses. Asian and European share indexes continued to fall sharply on Tuesday amid fears of a recession in the US leading to a global economic slowdown.

The Australian market saw its worst fall in 10 years. The European markets saw some recovery.

London's FTSE 100 index has had a bumpy day, falling more than three percent at the open. Earlier, Asian markets had tumbled with Japan's Nikkei index closing down 5.7 percent taking its decline this year to 18 percent.

Many analysts are predicting indexes could fall further in coming weeks.

The recent falls were triggered by fears of a global recession, after growing concern that a proposed US stimulus package, which would involve about 145 billion dollars in tax cuts to encourage spending, might not be enough.

International Monetary Fund chief Dominique Strauss-Kahn said the global economic situation was "serious," and that all countries in the world were suffering in the wake of a slowdown in US growth.

ANI