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Sensex falls to 18-month low

The Sensex ended the day at 24,825.04, losing 109.29 points or 0.44 per cent.

Mumbai: Amidst high bouts of volatility, the domestic equity markets closed at their lowest level in last 18 months as weakness in global stocks amidst continuing concerns regarding the health of Chinese economy triggered widespread risk aversion among global investors.

After plunging sharply during the opening bell, the Sensex and Nifty staged a smart recovery in the intra-day trade on the back of short covering and fresh buying in blue-chip stocks. But the markets failed to sustain momentum at higher levels as weakness in global stocks overwhelmed sentiments.

The Sensex ended the day at 24,825.04, losing 109.29 points or 0.44 per cent while the broader 50-share Nifty closed the session at 7,563.85, down 37.50 points or 0.49 per cent. “Technically, the Nifty is enjoying good support at 7,500 levels. That is the reason why we saw good amount of short covering at those levels, which helped the markets to bounce back in the intra-day trade. However, the way things are unfolding in international markets like the China slowdown and sharp fall in crude oil prices, it would be very difficult for the markets to sustain at the current levels. The build up of huge open interest positions in Nifty options contract at 7,300 and 7,200 levels indicate that the traders are expecting the markets to weaken in the medium term,” said Uday Narayan Dubey, vice-president, institutional desk at R.K.Global.

“The markets are likely to be volatile in the near term with investors cautiously waiting for November IIP data and December consumer price inflation numbers for further direction. Since the expectation from the upcoming Q3 earnings is muted, it may not be an eventful factor to the market,” said Vinod Nair, head of fundamental research at Geojit BNP Paribas Financial Services.

( Source : deccan chronicle )
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