For the first time in two years, the benchmark Sensex closed below the psychologically 10,000 level as funds continued their selling spree amid strong signs of recession in the US — the world’s biggest economy — becoming a reality.

The 30-share barometer on the Bombay Stock Exchange fell to end the week at 9,975.35, the lowest level since June 20, 2006 when the key index had closed at 9,822.52. The index also fell to an intra-day low of 9,911.32 during the week compared to 9,875.35 on July 24, 2006.

The Sensex ended the week at 9,975.35, against the last weekend’s level of 10,527.85, showing a sharp loss of 552.50 points, or 5.25 per cent.

The 50-share Nifty of the National Stock Exchange also dropped 205.60 points, or 6.27 per cent, to close at 3,074.35, against the last weekend’s level of 3,279.95.

Marketmen said signs of uncertainty on the domestic political front, coupled with fears of global recession becoming a reality, took a severe toll on the bourses. Foreign institutional investors continued their selling spree in view of the dim picture in the global financial markets.

Brokers said less-than-expected corporate earnings also contributed to the fall in Sensex. They said efforts by the government and the Reserve Bank to ease money supply in the system had no major impact on investor sentiment.

Meanwhile, the government has reportedly sought data from the Reserve Bank to consider a proposal to enhance the investment limit for bank exposure to equity markets.

source: Financialexpress

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