Mkts singe in Dubai crisis, end down despite smart recovery
Dubai's debt crisis has put Indian equities as well as global markets on fire since yesterday. The crack across the globe emerged when emirate said two of its flagship firms planned to delay repayment of billions of dollars in debt. The markets feared that this debt default could affect other countries as they are trying to recover from global meltdown.
But the benchmark indices as well as European shares discounted most of the news, due to which Indian equities recovered more than 2/3rd of losses in the last couple of hours, led by buying from insurance companies. The Nifty closed the day above 4,900 level while the Sensex above the 16,600 level.
Dubai's government on Wednesday said it would ask creditors of Dubai World, the conglomerate behind its rapid expansion, and Nakheel, builder of its palm-shaped islands, to agree a standstill on billions of dollars of debt as a first step towards restructuring. Dubai World has USD 59 billion of liabilities, representing a large part of Dubai's total debt of USD 80 billion.
The S&P, rating agency, had placed the ratings of four Dubai-based banks on negative outlook due to their exposure to Dubai World.
The Sensex closed 16,647, down 207 points and the Nifty fell 62 points to 4,943, as per provisional data.
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MUMBAI: Equities bounced back from intraday lows but ended in the red Friday on fears of financial crisis in Dubai. The decline was led by losses National Stock Exchange’s Nifty ended at 4942.40, down 63.15 points or 1.26 per cent. The index touched an intraday low of 4806.70 and high of 5005.05. Bombay Stock Exchange’s Sensex closed at 16,647, down 207.93 points or 1.23 per cent. The 30-share index hit a low of 16210.44 and high of 16718.80. BSE Midcap Index was down 1.31 per cent and BSE Smallcap Index declined 2.12 per cent. Amongst the sectoral indices, BSE IT Index was down 2.38 per cent, BSE Capital Goods Index fell 1.71 per cent and BSE Metals Index slipped 1.44 per cent. Nifty gainers comprised Suzlon (7.32%), Ranbaxy Laboratories (2.87%), Unitech (2.59%), BPCL (2.22%) and GAIL (1.17%). Among Nifty losers, Siemens (-5.65%), IDFC (-4.06%), Axis Bank (-3.42%), Ambuja Cements (-2.99%) and JP Associates (-2.87%) were the worst hit. Market breadth on BSE was extremely negative with 2003 declines against 740 advances. (All figures are provisional) | |
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Src: Moneycontrol, Economictimes