Just think how happy you would be if you lost everything you have right now, and then got it back again.
The losing continues for investors and Dassehra may not be as auspicious as one would have wished. While we took a day's break, world markets continued to singe under mounting concerns that the financial mess could lead to a painful and protracted global recession. The only way to be relatively happy is to wait without plunging in. We know you have already committed sizeable amount of money. That should not tempt you to average because the rules of the game seemed to have changed.
All efforts to stop the plunge seem to be going nowhere, as money markets remain under extraordinary stress and investor confidence continues to sink. One may think that the selloff is overdone and that valuations have slumped to mouth-watering levels. There are not many takers for these theories and rightly so for the moment.
Given the relentless sell-off across global markets, particularly in the US and Asia, we expect another gap-down opening. Things could get worse, especially if there is no improvement in markets in Asia and Europe. There are fears that our market may come closer to the lower circuit levels.
Today is also an important day from the quarterly earnings' point of view, as IT major Infosys will announce its results for the July-September quarter. Market expectations are quite low once again, and there is a lurking fear that top software companies may miss estimates and could also revise down full-year guidance. On the whole, the bulls should brace for another bad day in office.
FIIs were net sellers of Rs10.55bn (provisional) in the cash segment on Wednesday while the local institutions pumped in Rs10.83bn. In the F&O segment, the foreign funds were net sellers at Rs2.05bn. On Tuesday, the FIIs were net sellers of Rs5.48bn in the cash segment. Mutual Funds pulled out Rs3.07bn on the same day.
US stocks plummeted anew on Thursday, with the Dow Jones Industrial Average plunging almost 700 points, as panic reigned supreme despite the concerted global effort to stop the bleeding in equity markets. What could have been a moderately down day ended up in another grim session, with the Dow losing by more than 7%, leaving it below 9,000 for the first time in five years.
One year after climbing to its peak of 14,164.53, the Dow sank 678.91 points, its third-largest point loss on record, to finish at 8,579.19, pushing the blue-chip index under the 9,000 level for the first time since August 2003. The Dow's close leaves it 5,585.34 points, or 39.4%, under its year-ago high.
The S&P 500 Index retreated for a seventh day, losing 75.02 points, or 7.6%, to 909.92 to cap its longest streak of daily declines since 1996. The financial sector led the losses with the broader market barometer's all 10 industry groups deep in the red. The Nasdaq Composite index lost 95 points or 5.5% to finish at 1,645.12, its lowest point since June 30, 2003.
A key measure of investor fear hit an all-time high amid a growing fear that the credit crisis will send the global economy into a deep recession. The CBOE Volatility (VIX) index, or the VIX, hit nearly 64.
Over the last seven sessions, the Dow has lost 2,271 points, or 20.1%. Since hitting an all-time high of 14,164.53 one year ago, the Dow has lost 39.4%.
One year ago today, the S&P 500 too hit an all-time high of 1565.15. As of Thursday's close, it was down 41.9%. The Nasdaq has never come close to its record of 5,048.62 hit on March 10, 2000, at the end of the tech bubble. But after hitting a six-year high of 2,859.12 this time last year, the Nasdaq had slipped 42.5%, as of Thursday's close.
In the busiest day in New York Stock Exchange history, panicky investors dumped stocks left, right and center.
General Motors (GM) lost 31% and Ford Motor fell 21% on reports that auto sales will hit recession levels this year and get worse in 2009. In response, S&P put GM and Ford's debt ratings on CreditWatch with a negative outlook.
IBM's better-than-expected earnings had lifted tech stocks in the morning, but even Big Blue got dragged down in the afternoon slump.
Former Dow component AIG plunged 25% on reports that it was taking a Fed loan of up to US$37.8bn. The insurance giant already received an US$85 billion Fed loan last month that helped it skirt bankruptcy.
Treasury prices slipped, raising the yields. The benchmark 10-year note fell, raising the corresponding yield to 3.76% on Thursday from 3.63% late on Wednesday.
On the economic front, weekly jobless claims edged off a seven-year high, but they still outpaced forecasts.
US light crude oil for November delivery fell US$2.36 to settle at US$86.59 a barrel on the New York Mercantile Exchange. Prices slipped on continued bets that the slowing global economy will hurt demand.
Oil prices have tumbled on bets of slowing demand since the price of crude hit an all-time high of US$147.27 a barrel on July 11. Gasoline prices decreased for the 22nd consecutive day, according to a survey of credit card activity by motorist group AAA.
COMEX gold for December delivery fell US$20 to settle at US$886.50 an ounce. In currency trading, the dollar gained against the euro and the yen. Treasury prices fell, raising their corresponding yields. Bank lending remained tight as nervous institutions continued to hoard cash.
After the close of trade, Citigroup said it failed to reach a deal with Wachovia. Citi said that although it will seek damages, it won't block a Wachovia-Wells Fargo merger.
GE is due to report earnings on Friday. In addition, President Bush is expected to make a statement in the morning, telling investors that economic officials are doing everything they can to stabilize our financial system.
Europe stocks faltered by the end of trading on Thursday, unable to hold on to early gains. Up as much as 2.7% earlier, the pan-European Dow Jones Stoxx 600 index dropped 2% to 221.77 as traders sold into early gains.
UK's FTSE 100 shed 1.2% to 4,313.80, while Germany's DAX 30 fell 2.5% to 4,887.00 and the French CAC-40 lost 1.6% to 3,442.70. In Iceland, trading has been halted until Monday as the government nationalized its largest lender, Kaupthing.
Among the emerging markets, the Russian RTS index shot up by nearly 11% to 844. Elsewhere, the Bovespa in Brazil was down 3.9% at 37,080 while the IPC index in Mexico dropped 1.8% to 20,310 and Turkey's ISE National 30 index rose 0.27% to 39,040.
Heavy selling in the index pivotals like Reliance Industries, Infosys and L&T coupled with a crash in the US and sharp decline in the Asian markets dragged the Indian bourses to open with a negative gap. The key indices hit fresh 2008 low post Sun-outage.
However, markets witnessed a strong recovery in the mid-afternoon trades. The solid bounce back was led by auto, pharma and select power stocks. The BSE benchmark Sensex recovered over 650 points and the NSE Nifty index recouped around 200 points from their respective day’s low. Te BSE benchmark Sensex ended 366 points lower to close 11,328 and the NSE Nifty index lost 92 points to close at 3,513.
Monnet Ispat, the sponge iron manufacturer has announced that it was planning to enter the services sector and provide total solution for setting up coal washeries, according to a report.
The company has reportedly said that it has tied up with Japan Coal Energy Centre (JCOAL) and Daniel of the US.
Monnet Ispat declined by over 15% to Rs241. The scrip touched an intra-day high of Rs270 and a low of Rs210 and recorded volumes of over 22,000 shares on BSE.
Compact Disc announced that the Board of Directors of the Company would meet on October 17, 2008 to consider offer from iMedia Ventures Ltd to invest USD 10mn in the expansion project of the Company and for buying 15% equity in the Company.
The stock was down by 9% at Rs35 hitting an intra-day high of Rs39 and a low of Rs33 and recorded volumes of over 40,000 shares on BSE.
Shares of HOV Services lost 10% to Rs57. According to reports, REcap partners LLC would acquire the company for ~Rs9.5bn. The scrip touched an intra-day high of Rs66 and a low of Rs57 and recorded volumes of over 20,000 shares on BSE.
Shares of Ranbaxy have rallied by over 6% to Rs270 after media reports stated that the US department of justice has withdrawn its motion against Ranbaxy. The scrip has touched an intra-day high of Rs276 and a low of Rs236 and has recorded volumes of over 12,00,000 shares on NSE.
Indiabulls Real Estate plunged by over 10% to Rs118 after the company announced that its Q2 profit plunged 77% to Rs80mn from Rs341.5mn a year earlier. However, net sales rose to Rs815.6mn from Rs252.7mn a year earlier.
The scrip touched an intra-day high of Rs132 and a low of Rs100 and recorded volumes of over 61,00,000 shares on BSE.
ONGC slipped 3% to Rs963. According to reports, ONGC Videsh Ltd., the overseas unit of ONGC was in talks with Iran for exploration of an oil block in the northern part of the country. The scrip touched an intra-day high of Rs981 and a low of Rs943 and recorded volumes of over 4,00,000 shares on BSE.
Bajaj Auto Finance was locked at 20% lower circuit at Rs77.55 after 3.2% of equity changes hands in a single trade. The scrip touched an intra-day high of Rs99.75 and a low of Rs77.55 and recorded volumes of over 12,00,000 shares on BSE.
Shares of United Spirits lost by over 17% to Rs939 after the company’s 1.34% equity shares changed hands in a single block trade. The scrip touched an intra-day high of Rs1095 and a low of Rs925 and recorded volumes of over 13,00,000 shares on BSE.