NEW DELHI: Finance minister Palaniappan Chidambaram said on Thursday
there was adequate liquidity in the banking system and he has advised
banks to lend aggressively.
Chidambaram also asked investors not to sell stocks in panic. The
minister's comments came after the main stock index plunged to its
lowest since June 2006 amid a gloomy global economic outlook.
Markets recovered after the finance minister's statement and were also
helped by the Sebi directive to FIIs to reverse short positions. A
positive opening on the European bourses also aided the positive
sentiment. Gains in technology and consumer durables led the upmove.
At 2:20 pm, Bombay Stock Exchange's Sensex was at 10,117.18, still
down 0.52 per cent or 52.72 points, recovering from a low of
9,681.28.
National Stock Exchange's Nifty was at 3022.90, down 1.38 per cent or
104.8 points. The index touched a low of 2918.10 and high of 3085.10.
BSE Midcap and Smallcap indices were down 1.79 per cent and 2.19 per
cent respectively.
Biggest Sensex gainers were TCS (4.96%), Wipro (4.92%), BHEL (4.7%),
Infosys Technologies (2.97%) and HDFC Bank (2.8%).
Tata Motors (-10.76%), Tata Steel (-10.68%), Hindalco Industries
(-9.56%), Sterlite Industries (-8.71%) and Ranbaxy Laboratories
(-5.69%) were under pressure.
Market breadth on BSE showed 1745 declines against 642 advances.
Earlier, investors capitalised on the sharp fall in indices in opening
trade and took positions in stocks available at cheaper levels. This
triggered a recovery in benchmarks from day's lows. Metals and realty
continued to extend overnight losses.
Benchmarks opened below psychological levels following sharp declines
overnight in US and Asian stocks, which tumbled to 5-year-lows, amid
heightened worries over a global recession.
In global markets, US stocks plunged on Wednesday as a raft of
disappointing corporate earnings from major US companies fueled
pessimism about the global economy despite further thawing in credit
markets.
The Dow Jones industrial average sank 514.45 points, or 5.69%, to end
at 8,519.21, the Standard & Poor's 500 Index slumped 58.26 points, or
6.10%, to finish at 896.79 and the Nasdaq Composite Index slid 80.93
points, or 4.77%, to close at 1,615.75.
Asian stocks tumbled Thursday, with the Nikkei plunging more than 4%,
after another dive on Wall Street. The broader Topix lost 4.83%, Hang
Seng lost 4.61% and Straits Times declined 2.93%.
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