Markets Tumble: Sensex Tests 15000

Markets Caught in Global Meltdown Storm; Sensex Tests 15K

Markets opened with a big gap down following negative global cues. All the Asian markets were trading with big losses as the Dollar tumbled to 97 against the Yen after the Fed lowered discount rate by 25 bps to 3.25%. On Friday the US markets tumbled after Bear Stearns announced that its liquidity had deteriorated severely. JP Morgan is to buy Bear Stearns at $2/share; this is less than a 10th of its value last week.

The Sensex is down 951.03 points or 6.03% at 14,809.49 (the second biggest meltdown in its life time) and Nifty down by 5.11% or 242.70 points at 4503.10. The Benchmark indices, both midcap and smallcap are down around 7% with midcap closing at 6,124.35 and small cap ending at 7,522.23 , thus cutting 459.10 and 557.27 respectively. Sensex crashed below the 15000 mark today and ended near the lowest point, that is lowest since August 2007 and Nifty hit lowest close since September 2007. The NSE advance:decline ratio was 1:17. Banks, metal and realty stocks have been hammered the most. The Bankex was down 9% at 7,569.16, followed by Realty down by 7.86% at 71,06.53, cutting 606.30 today and Metal Index down around 7.5% at 13,725.52.

Indices Watch

This data was last updated on Monday, March 17, 2008 4:45:15 PM IST
Index	Open	High	Low	Current Value	Previous Close	Change(Pts)	Change(%)
SENSEX	15,326.93	15,326.93	14,738.27	14,809.49	15,760.52	-951.03	-6.03
MIDCAP	6,505.19	6,505.19	6,105.23	6,124.35	6,583.45	-459.10	-6.97
SMLCAP	8,021.87	8,021.87	7,510.35	7,522.23	8,079.50	-557.27	-6.90
BSE-100	8,111.19	8,111.19	7,800.81	7,832.98	8,355.75	-522.77	-6.26
BSE-200	1,907.53	1,907.53	1,830.92	1,838.26	1,962.76	-124.50	-6.34
BSE-500	6,092.29	6,092.29	5,837.53	5,859.51	6,260.84	-401.33	-6.41
BSE Sectoral Indices
AUTO	4,469.47	4,469.47	4,309.12	4,329.46	4,539.07	-209.61	-4.62
BANKEX	8,004.41	8,004.41	7,511.47	7,569.16	8,323.09	-753.93	-9.06
CD	3,949.60	3,949.60	3,574.22	3,638.56	4,028.80	-390.24	-9.69
CG	13,098.03	13,134.81	12,673.16	12,706.31	13,579.94	-873.63	-6.43
FMCG	2,148.77	2,167.37	2,107.34	2,119.60	2,189.31	-69.71	-3.18
HC	3,773.79	3,773.79	3,606.83	3,621.90	3,820.64	-198.74	-5.20
IT	3,334.62	3,358.27	3,280.57	3,297.71	3,406.55	-108.84	-3.20
METAL	14,415.06	14,415.06	13,636.60	13,725.52	14,844.87	-1,119.35	-7.54
OIL&GAS	10,045.72	10,077.06	9,766.89	9,801.86	10,354.81	-552.95	-5.34
POWER	3,038.19	3,053.64	2,962.26	2,973.68	3,149.48	-175.80	-5.58
PSU	7,356.35	7,356.35	7,121.77	7,153.44	7,527.22	-373.78	-4.97
REALTY	7,325.70	7,364.92	7,052.65	7,106.53	7,712.83	-606.30	-7.86
TECk	2,845.18	2,845.18	2,793.14	2,812.68	2,918.16	-105.48	-3.61
BSE Dollex Indices
DOLLEX-30	3,112.39	3,112.39	2,964.62	2,978.58	3,200.83	-222.25	-6.94
DOLLEX-100	2,075.44	2,075.44	1,976.95	1,985.10	2,138.28	-153.18	-7.16
DOLLEX-200	785.51	785.51	746.78	749.75	808.36	-58.61	-7.

_{source:http://www.bseindia.com/mktlive/mktwatch.asp on 17.03.2008 at
16:44:05 GMT}

Peter Morgan of HSBC feels that the market is expecting the Fed to cut rates by 75 bps tomorrow. Morgan sees a prolonged period of relatively weak growth in the US markets.

Shankar Sharma of First Global said investors need to be cognizant of changing market conditions. "The global bull market that started in 2003 seems to have ended. There is no point looking at Sensex PEs as one is not getting value stocks to buy."

Vetri Subramaniam, CIO-PMS, Motilal Oswal Securities, sees a little bit more volatility, hopefully on the upside in the next few months as compared to the last two. He also believes there are few tough policy decisions waiting to happen in terms of growth, interest rates and inflation.

Jyotivardhan Jaipuria, Head-Research, DSP ML, thinks markets are headed lower, but will probably move a bit higher before moving to new lows. He also believes commodity prices, food inflation and high money supply are the next problems on the list to be addressed.

James Glassman, Senior Economist at JP Morgan Chase Bank feels that the Fed's discount rate cut may be a small part of a bigger package. "Personally, I think a half a point rate cut is possible, is likely, even though the market was looking for something bigger."

Paul Parambi of Kotak Mahindra Bank feels that large institutions and investors are looking at markets other than the US. Capital can come into India, if the corporates deliver numbers, he told CNBC-TV18. If there is a Bear Stearns-like situation with other investment banks, there could be serious problem, he said.

So should investors be bottom fishing, and more importantly, what should they look at picking up now? Or should investors look at cashing out, and if so, what should they look at selling?