Sensex Recovers Due To Bargain Buying, Still Lower By 140 Points
Mumbai, Aug 8: After an over 500-point plunge within minutes of opening today, the stock market recouped more than half of its losses by mid-day as some investors saw buying opportunities in the meltdown triggered by the debt crisis in the US and Europe.
In the first day of trading after the US lost its top-notch creditworthiness rating, Indian stocks fell sharply this morning, causing a plunge of 546 points in the Sensex and wiping out an estimated Rs 2 lakh crore in investors' wealth. However, a recovery was seen taking place in late morning trade and by mid-day, the Sensex had recovered more than half of the losses.
The 30-share barometer index was trading 139.67 points down at 17,166.20 points at 1255 hrs after dipping to as low as 16,759.45 points—the lowest since June 10, 2010 -- earlier in the morning.
Analysts said that the recovery was partly due to the impact of the US downgrade sinking in among investors and also because of bargain buying—purchases of stocks at lower levels—by some fund houses.
A positive opening in some European markets also helped improve the market sentiment, although Asian markets recorded huge losses.The sharp fall of this morning came in the first trading session after the US lost its ‘AAA' credit rating for the first time in history, as ratings agency S&P was not convinced by the efforts being made to tackle the country's debt problems.
Today's fall follows an over 1,000-point plunge in the Sensex over the last four trading sessions amid weak global cues such as mounting debt worries in the eurozone.
Investors' wealth has been eroded by about Rs 4 lakh crore in the past four sessions in India, while global markets lost an estimated USD 2.5 trillion last week. PTI