Stock markets catch the global flu on Monday

MARKET MELTDOWN: The Sensex slid nearly 800 points and Nifty dived below 6,000 points.

People who read this also read:

Market ends marginally down: Bank down, realty up

Buyers show interest in realty, some technology stocks.

• Markets open strong on positive global cues
• Markets open higher on tech stocks support

Featured Blog

Sagarika Ghose

Red Letter Day

Featured Slideshows

Related Headlines

powered by

• Market ends marginally down: Bank down, realty up
• Markets open strong on positive global cues
• Markets open higher on tech stocks support

Keywords: markets, Sensex

New Delhi: Monday blues hit Dalal Street with a vengeance. The signs were ominous at opening bell as stocks in Asia had fallen hard due to high inflation numbers from the US economy. Result – one of the biggest drops we have seen in the markets of late.

It was a double whammy with the Sensex sliding nearly 800 points and Nifty dived below 6,000 to one of its biggest ever falls. Midcap and small cap stocks were not spared either.

There were three reasons for Monday’s big fall:

• Global market weakness.
• FII's typically go slow in the month of December as they like to book profits before X-mas holidays when they take off themselves.
• Margin calls by local traders.

And all of the above had a cascading impact on the markets. “This kind of fall is not expected or anticipated but if you notice there was a huge liquidation by the local players also in anticipation of the margin fear during the afternoon,” market analyst SP Tulsian said.

So does Monday's meltdown signal more bad news for the markets? Not really. India is merely catching up with its Asian peers and such a correction was long overdue.

But in no way does it change the long-term view of Dalal Street as one of the best stories in the world of stock markets.

“We are getting a bit bearish purely on the global situation. There is nothing in the domestic market to suggest a problem in the bull market,” portfolio manager P N Vijay explained.

As of now it looks like Christmas may bring little cheer on Dalal Street, but the bulls are not out of the race yet because with the New Year there is hope that foreign investors will once again drive in to the India story.