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Sensex Recovers

The Sensex melted like waxwork as it plunged over 1,100 points below the 10,000 level. It was the day of a bloodbath on the Dalal street. The 30-share benchmark index fell 1,111.70 points at 9,826.91.

The free fall in share prices led the Sensex and the Nifty down by 10% by early afternoon trading session, as a result, the trading was suspended for 1 hour between 11:55 am to 12.55 pm. It was the second time in the indices' history. The first being on May 17, 2004.

After plunging over 1,100 points, the BSE Sensex made a recovery of 654 points to close 456.84 points down at 10,481.77, below the 10,500 level.

Similarly, the NSE Nifty fell 345.90 points at 2,901.00 below the 3,000 mark. The Nifty aslo made a pull back from its lower levels to close 165.55 points down at 3,081.35, below the 3,100 level.

Among the stocks that ended in positive territory on Monday were Satyam Computer up 2.3% at Rs 680, Bhel moved ahead 0.5% at Rs 1,970, Cipla moved up 0.2% at Rs 222, and ICICI Bank jumped up 0.2% at Rs 558.

Whereas, index heavyweights Reliance Industries moved down 5% at Rs 926.050 and Infosys moved down 5.3% at Rs 2,814 ended with heavy losses for the day.

Monday's free fall is attributed to be due to heavy selling of funds.

Besides, the weakness across the Asian region also led to the weakness in domestic bourses. US inflation worries continued to weigh on Asian market. Key indices like Hong Kong, Japan, South Korea, Singapore and Taiwan were also down by between 1.8% to 3.1%.

The BSE clocked a turnover of Rs 3,978 crore, much lower than Friday’s Rs 5,134 crore.

Meanwhile, RBI said on Monday it is in touch with major settlement banks and the stock exchanges to ensure that payment obligations on the exchanges are met smoothly. The central bank's statement on availability of liquidity follows a 10% fall in share prices in early trade on Monday.

Economic affairs secretary Ashok Jha said that foreign institutional investors and mutual funds were net buyers on Monday, despite a large fall in the main stock index -- more than 10 percent at one point. He also said the country's economic fundamentals were sound, with inflation under control, gross domestic product likely to be strong in the fiscal year to end-March, 2007, and corporate profits buoyant.

Indian finance minister P Chidambaram said on Monday retail investors need not worry over the slide in the stock market as the economic fundamentals of the country were strong. "Ordinary investors need not worry as fundamentals of the economy are strong... the growth story I am confident will continue this year too," Chidambaram said in the upper house of parliament.

Metal stocks were hit hard following a setback in global metal prices. Hindustan Zinc fell 20% at Rs 631.55, Sterlite Industries shed 11% at Rs 360.30, Nalco moved down 6.4% at Rs 229, Tata Steel fell 7.6% at Rs 465 and Hindalco moved down 4.6% at Rs 180.

Some of the major losers among Sensex constituents were Wipro down 8% at Rs 451, Grasim fell 8% at Rs 1,770, UltraTech Cement moved down 8% at Rs 635, Maruti Udyog fell 7% at Rs 729 and TCS moved down 6.5% at Rs 1,7700.

Tata Motors shed 7.5% at Rs 785, after it reported a lower than expected 18% growth in Q4 March 2006 net profit.

Source: Indiatimes.

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