Sensex plunges 506 points: rupee breaches 47 a dollar

The rupee slipped below 47 to a dollar-a two-year low and the BSE Sensex plunged to its lowest level in two months, closing out at 12,595.75, as Indian markets fell in tandem with their Asian and European peers on Monday. FIIs pulled out $149.8 million in equities from domestic markets.

Real estate and banking stocks led the rout with ICICI Bank dropping 12% to its lowest in more than two years. IT stocks also plunged on fears that the global financial crisis will reduce software spends.

The Sensex fell 506.43 points, or 3.9%, to 12,595.75, the steepest since July 29. All but one of the 30 stocks in the benchmark index declined as it touched a one and a half year low of 12,402.84 points during the session.The S&P CNX Nifty of the NSE slid 135.20 points, or 3.4%,to 3,850.05.

To read the full article, click here..
To read the epaper, visit: http://epaper.financialexpress.com

Fearing meltdown, Fed bails out American International Group Inc with $85-billion package

The US government took control of American International Group Inc (AIG) in an $85-billion bailout to prevent the bankruptcy of that nation's biggest insurer and the worst financial collapse in history. The Federal Reserve will provide a two-year loan, take 79.9% of the New York-based company's stock and replace its management because " a disorderly failure of AIG could add to already significant levels of financial market fragility",according to a statement by the US central bank late on Tuesday.

The dollar fell against the yen as the Fed's bailout of AIG failed to quell concern that credit losses will deepen. AIG unravelled as the worst housing crisis since the Great Depression led to more than $18 billion in losses over the past year. A meltdown could have cost the financial industry $180 billion, according to RBC Capital Markets, because AIG provided insurance on more than $441 billion of fixed-income investments held by the world's biggest institutions, including $57.8billion in securities tied to sub prime mortgages.

The government is lending AIG the money at 8.5 percentage points above the three month Libor, or a current rate of about 11.5%.

To read the full article, click here..
To read the ePaper, visit: http://epaper.financialexpress.com

Rupee slide persists

The rupee fell the sharpest in a decade on speculation that the trouble on Wall Street would lead to emerging-market asset sell-offs by jittery global investors.The currency hit its lowest level against the dollar in more than two years. The Sensex also fell for a sixth day in tandem with equity markets world wide. It lost a marginal 12.47 points to end at 13,518.80, heading for its first annual loss since 2001.

The rupee may come under more intense pressure as FIIs continue to hawk Indian equities. The Indian currency ended at 46.89/90 against the dollar, off a trough of 46.99-its lowest since July 24, 2006-as banks arbitraged with a weaker overseas market. Dealers suspected RBI intervened to halt the slide just short of 47 against the greenback. JPM organ forecasts the rupee to drop to 47 by the end of the year. The rupee was the second biggest loser among the ten most active currencies in Asia outside Japan on Tuesday.

To read the full article, click here..
To read the ePaper, visit: http://epaper.financialexpress.com

Trickles of woes, torrents of panic

India's equity markets continued to move in inverse proportion to crude prices, which touched a historic $144 a barrel on Tuesday, as the calendar year passed into the second half on Tuesday. Extending the losses for a third consecutive session, key Indian share indices breached psychological levels on Tuesday as investors started dumping more stocks.

The sharp fall in the stock market, combined with high crude prices and a record monthly trade deficit, took the rupee down to a 15-month low on Tuesday. The local currency ended at 43.34/36 a dollar, taking its fall this year to more than 9%. It briefly fell to a low of 43.50, it weakest since April 2,2007.

The 30-share Sensex of the Bombay stock Exchange (BSE), after witnessing subdued opening,turned south wards with weak opening in the European markets to end the day with a loss of 499.92 points, or 3.71%, to end below 13k-mark at 12,961.68 points.

The broader S&P CNX Nifty of the National Stock Exchange (NSE) posted a loss of 143.80 points or 3.56% breaking the 4k level to close at3,896.75 points.

To read the full article, click here....
To read the ePaper, visit: http://epaper.financialexpress.com