13th march 2008 - Sensex crashes by 771 points

Sensex crashes by 771 points

MUMBAI: The contagion effect of U.S. recession is continuing and the domestic Bombay Stock Exchange benchmark index (Sensex) fell sharply by 770.63 points or 4.78 per cent to 15357.35.

The U.S. Government data on Thursday showed that retail sales were plunging and joblessness was increasing at an alarming rate. While the U.S. dollar continued its downward spiral, sinking against major currencies such as euro and the Japanese yen (a 12-year low against yen), analysts are expecting that the U.S. Federal Reserve would reduce interest rates by another 75 basis points by March 18. This is again an indication that problems in the U.S. economy are much deeper than expected and the long-term impact of the measures taken by the U.S. Fed, so far, to ease the credit woes, is remaining uncertain.

U.S. crude oil for April delivery hit more than $110 a barrel and the London Brent Crude for April touched another high of $106.80. However, investors are rushing to precious metals to hedge against high oil prices, inflation and softening U.S. dollar. The yellow metal, gold, was shining in the turmoil with its price touching $1,000 an ounce in the U.S. futures (April delivery) on Thursday.

The impact of U.S. recession was reflected on all markets around the globe, including Asian markets. Japan's Nikkei 225 was down by 3.33 per cent. Among U.S. stock indices, NYSE Composite, Nasdaq Composite and S&P 500 are also showing strong downward trends.

The domestic loss was unstoppable with the prices of pivotals falling and the BSE 30-share sensitive index (Sensex) closed at 15357.35. The BSE Midcap lost 382.18 points or 5.53 per cent, Smallcap 456.74 points or 5.35 per cent and the BSE 500 lost 358.33 points or 5.53 per cent. The 50-share National Stock Exchange Nifty was down by 248.40 points or 5.10 per cent at 4623.60. CNX Midcap also lost 5.72 per cent.