Bloodshed continues; Sensex closes below 12,000
BSE 30-share Sensex lost 724.62 points or 5.78% to 11,801.70. The index shed 793.75 points at the day's low of 11,732.97, hit in late trade, its lowest level since 13 September 2006.
The S&P CNX Nifty was down 215.95 points or 5.66% to 3,602.35. Nifty hit a low of 3,581.60, its lowest level since 16 March 2007.
As per the provisional figures on BSE, the foreign institutional investors (FII)s sold shares worth Rs 1,169.33 crore while domestic funds bought shares worth Rs 661 crore today, 6 October 2008.
BNP Paribas France's biggest listed bank, today, 6 October 2008, said it was paying 14.5 billion euros ($20.1 billion) to take control of European financial group Fortis. Germany gave blanket bank deposit guarantee on Sunday, 5 October 2008, to prevent panic as officials clinched deals to rescue Germany's Hypo Real Estate -- after an initial bailout failed -- and recapitalize two other European banks.
In South Korea, banks were having trouble raising foreign currency funds and the government pledged to give banks access to the country's foreign exchange reserves, the world's sixth largest at nearly $240 billion.
With the end of third quarter of the calendar year 2008 on Tuesday, 30 September 2008, hedge fund are bracing for heavy redemption amid US financial sector crisis which has already spread to Europe. Investors in hedge funds are usually allowed to exit funds only on the final day of the financial quarter. Large-scale investor redemption in hedge funds may trigger further selling by foreign funds in India. Hedge funds mainly operate through the participatory notes route in India. However, there is no data available on the quantum of hedge funds’ investment in India.
The next major trigger for the market is Q2 September 2008 results. IT bellwether Infosys kickstarts the reporting season on 10 October 2008.
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