Sensex sinks by 438.44 points

Mumbai, Aug 21: Notwithstanding stabilising global indices, the Sensex today declined by a whopping 438.44 points on the Bombay Stock Exchange (BSE) to settle below the psychological barrier of 14,000 at 13,989.11, in backdrop of talks about mid-term general elections in the country.

''The barometer index had actually opened higher on positive global cues at 14,512.19 from previous close of 14,427.55.

However, it started sinking throughout the day on account of the stand-off between the UPA government and its left ally over the Indo-US nuclear deal,'' jittery market participants said.

The broader National Stock Exchange (NSE) S&P CNX Nifty also tanked by around 135 points to settle deep into the red at 4,074.90 from its previous close of 4,209.05, after actually opening marginally higher at 4,209.55.

''All the sectoral indices on BSE suffered losses, while shares from metal, real estate and banking slumped the most in the market meltdown today,'' market analysts noted.

BSE data showed that the market breadth was weak as 2,234 shares declined while 509 advanced and 44 remained unchanged. The total turnover amounted to Rs 4,201 crore. The entire 30-member Sensex pack slumped.

SBI, HDFC bank, ICICI bank, Reliance Energy, Mahindra&Mahindra, Reliance Communications, Reliance Industries, Wipro, Satyam Computers, Infosys Technologies, Ambuja Cements, HDFC and Dr Reddy's Laboratories are all in negative terrain.

In the US, the Dow Jones Industrial Average rose 42.27 points, or 0.32 per cent, to end at 13,121.35. The Standard&Poor's 500 Index edged down 0.03 per cent to 1,445.55 and the Nasdaq Composite Index gained 3.56 points, or 0.14 per cent, to end at 2,508.59.

In Asia, Hong Kong's Hang Seng, China's Shanghai Composite, Japan's Nikkei and South Korea's Seoul Composite were in the green, while Taiwan's Taiwan Weighted and Singapore's Straits Times slipped.

Banking stocks tumbled more on concerns of sub-prime lending in US. SBI plunged 5.50 per cent to Rs 1,465.30 on 8.05 lakh shares. It was the top loser from the Sensex pack. Reliance Industries, the country's biggest private sector entity, slipped 2.77 per cent to Rs 1,742.10 on 10.65 lakh shares. Energy analysts say the company has made an oil discovery in the Krishna basin while drilling the third well. The discovery is estimated to be around 20 meters in thickness, making it possibly one of the largest oil discoveries on India's east coast.

Information technology (IT) stocks came under pressure on concerns that they may face tougher market conditions if the US credit woes squeeze IT spending. Wipro, Satyam Computers and Infosys Technologies scrips slipped. IT companies derive more than half of their revenue from the US. The rupee was hovering at 41.22 against the US dollar, stronger than the previous session close of 41.33/34, during intra-day.

Central Bank of India settled at Rs 115.40 on BSE, a premium of 13.14 per cent over its initial public offering (IPO) price of Rs 102. It made its debut at Rs 130.10 on BSE. The stock touched a high of Rs 133.25 and a low of Rs 114 during the day. About 2.43 crore shares were traded on the counter on BSE. The Central Bank of India (CBI) IPO had ended on July 27 with 62.07 times subscription.

Oil prices dropped today as traders shifted focus from the threat of Hurricane Dean on US energy facilities in the Gulf of Mexico to worries about global stock markets. Light, sweet crude for September delivery lost 36 cents to USD 70.76 a barrel on the New York Mercantile Exchange.

UNI