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Friday, February 5, 2010

Sensex closes below 15800 mark on global cues

Feb 5, 2010
Indian stock markets sank on the worldwide fall after an unexpected increase in the US jobless claims and adding to the woes from the European nations struggling with shooting up budget deficits.

India’s key benchmark index, Sensex witnessed sharp fall in the opening session today beaching the psychological 16,000 mark. The index remained range-bound between 15,935 to 15,811 points down by over 2% from its Thursday’s close.

Metal stocks were the worst hit on the Bombay Stock Exchange (BSE) as metal prices fell on the London Metal Exchange (LME) on 4 February 2010. Index heavyweight Reliance Industries slipped below the Rs.1000 mark, however it regained shortly.

Asian shares plunged following an unexpected increase in US jobless claims and slide in commodities. The key benchmark indices in China, Hong Kong, Japan, South Korea, Singapore and Taiwan were down by between 1.48% to 3.47%.

The Dow Jones Industrial Average index briefly fell below the crucial 10,000 mark, as stocks suffered their worst losses in more than nine months. Escalating sovereign debt problems in Europe and an unexpected rise in jobless claims put investors on the defensive just ahead of Friday's crucial payrolls report.

Thursday, 04 February 2010 proved hampering for the global indices including Dow Jones Industrial Average fell 268.37 points, or 2.61%, to 10,002.18. The Standard & Poor's 500 Index dropped 34.17 points, or 3.11%, to 1,063.11. The Nasdaq Composite index lost 65.48 points, or 2.99%, to 2,125.43.

US economic data on Thursday showed initial jobless claims rose by 8,000 last week to a seasonally adjusted 480,000. This is against economists' expectation of a drop of 10,000.

Meanwhile, the European Central Bank (ECB) and Bank of England (BOE) kept interest rates at record lows on Thursday as financial markets looked for guidance on growing eurozone debt problems.

Investors withdrew $516 million from Asian equities outside of Japan in the week ended 3 February 2010, the research company said in a statement. Within Asia, China equity funds reported net outflows for the fifth time in six weeks while Indian funds lost $180 million, the most in 68 weeks, according to the statement.

Following rising prices of potato and pulses, food inflation rose to 17.56% in the week ended 23 January 2010 from 17.40% in the previous week, government data released on Thursday showed. The inflation for primary articles, which include food and non-food items, marginally eased to 14.56% in the reporting week from 14.66% in the previous week. The fuel price index rose 5.88%.

India's largest private sector steel maker by capacity Tata Steel slumped 3.51% to Rs 556.90 and was the top loser from the Sensex pack. Hindalco Industries (down 2.5%), Sterlite Industries (down 1.43%), National Aluminium Company (down 3.98%), Sesa Goa (down 3.08%), and Hindustan Zinc (down 4.49%), edged lower.

Index heavyweight Reliance Industries (RIL) fell 1.31% to Rs.1006.50, after sliding to day's low of Rs.995.05. The company's net profit rose 15.77% to Rs.4008 crore on 89.77% surge in total income to Rs.57364 crore in Q3 December 2009 over Q3 December 2008. RIL said the results had been reworked and restated to include figures from Reliance Petroleum, which it absorbed last year. The company announced the Q3 result during market hours on 22 January 2010.

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