Sensex nosedives 480 points

Banking, metal and realty stocks pull down the benchmark index

RIL, ONGC, Bharti Airtel recover
U.S. Govt rejects GM revamp plan

The stock indices fell sharply wiping out most of the gains these benchmark indices regained in the last few days. The benchmark Bombay Stock Exchange 30-share sensitive index Sensex) nosedived by 480.35 points at close on Monday.
The Sensex, which opened at 9902.35, touched a low of 9520.96 and finally closed at 9568.14, loosing 480.35 points from its previous close of 10048.49, a recent high. The S&P CNX Nifty fell below the psychological mark of 3000. The broader 50-share NSE Nifty lost 130.50 points to close at 2978.15 compared to the previous close of 3108.65.
The fall was led by banking, metal and realty stocks on weak global cues, which hit the investor sentiment. However, Reliance Industries, ONGC and Bharati Airtel recovered from their lower levels, which lifted the indices marginally at close On the last days of the financial year, banking stocks declined on concerns of mark-to-market (MTM) losses on their bond portfolio. The yield of the ten-year bonds fell for the seventh day in a row on Monday, the longest losing streak in almost two months. The yield on ten-year benchmark bonds (2019) climbed to the highest since November 2008.
Metal stocks lost as metal prices declined on the London Metal Exchange (LME). The rate-sensitive realty sector stocks declined on news that many bankers were still not ready for a major rate cuts as many expected. The European stock markets dropped as the U.S. Government rejected restructuring plans for General Motors and Chrysler, the cash crunch automakers. Moreover, Spain announced its first banking bail-out plan since the beginning of the crisis. Key benchmark indices of the U.K., France and Germany declined.
Asian markets declined for the first time in the last six days. The key benchmark indices in China, Hong Kong, South Korea, Singapore and Taiwan were down between 0.69 per cent and 4.78 per cent. Japan’s Nikkei slipped by 4.53 per cent as investors booked profit after last week’s rally. U.S. Treasury Secretary Timothy Geithner said that some banks would need large amounts of Government aid and he has suggested a plan to shore up the nation’s banks with a public-private partnership to finance the purchase of illiquid real estate assets. Meanwhile, reports suggest that a coordinated agreement on a stimulus plan to revive the global economy by G-20 nations’ summit appears diminished ahead of the formal start of the meeting.