India's sensitive index sheds points on global financial crisis

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Mumbai, Sept 29 : Bombay Stock Exchange (BSE) provisionally fell 3.87 per cent on Monday as a spreading global financial crisis kept investors nervous, with top private sector lender ICICI Bank leading the losses.

During the day's trading BSE was down more than five per cent, hitting its lowest in one and a half years.

The 30-share index provisionally closed 472.58 points down at 12,629.60, with all but three of its components falling.

The 50-issue National Stock Exchange (NSE) index provisionally lost 2.9 per cent to 3,869.65.

Small investors said that though the Indian companies are fundamentally strong, the turmoil in the international markets is reflecting at the stock markets.

But investors said that this should be taken as a good investment opportunity.

"This is a reaction to international turmoil. Financial markets are in difficulties and what is happening in America is reflecting. But our companies are fundamentally good and some pick up can be made from the 'A' group shares and small investors have some money, some cash left out which they can use this opportunity," said Santosh, a small investor.

Experts also said that this can be used as good investment opportunity but investors should take care that they invest in long term and not play in the short term.

"Small investors should stop the activity in the futures market because what happens is that there are very fewer amounts of margin you have to pay and in position is very large and then you sell in panic and book losses. In order to avoid that, you should buy only in the cash market, keep those stocks for sometime may be 18 months to 24 months is the time when you can get good profits. So, play with your own money, do not invest from the over leveraged amount, do not pay huge interest for borrowing that money and then buy into Indian markets, equity markets because equity markets are going to be volatile," said Ashok Ajmera, a market analyst in his office.

Rupee also fell past 47.04 per dollar to its weakest since June 2003 on Monday as month-end dollar demand from importers and oil refiners weighed and sharp losses in the share market raised worries about capital outflows.

U.S. lawmakers prepared to vote on Monday the proposal to establish a 700 billion dollar fund to save the financial system from ruin, even as bank failures in Europe weighed on investors.

The Belgian, Dutch and Luxembourg Governments were forced to rescue financial firm Fortis over the weekend.

In addition, the British government will take over mortgage lender Bradford and Bingley, people in the bank industry familiar with the matter told Reuters.

Japan's Nikkei was down 0.3 per cent, while MSCI's measure of other Asian markets fell 1.4 per cent.

ANI

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