The Hindu Business Line : Gloom over Citigroup job cuts spreads; Sensex sheds 353

The gloom that swept across global markets following Citigroup’s announcement it would axe 50,000 employees took India in its sweep too, sending the benchmark indices plunging four per cent.

The Sensex closed below the 9,000-mark at 8,937, falling 353 points. The Nifty closed at 2,683, falling 116 points.

With little of consequence emerging from the G-20 meeting and with Japan’s entering into a recession, the US overnight market fell two per cent. The Asian markets opened weak on Tuesday, and the Indian markets followed suit.

The Union Finance Minister, Mr P. Chidambaram’s statement at the India Economic Summit in New Delhi that the Government will take steps to stimulate the domestic economy failed to arrest the slump.

There was immense pressure on the IT and technology stocks as a consequence of the Citigroup announcement; whereas the earlier market slumps were usually led by the realty and banking stocks.

FIIs were yet again net sellers, their net sales amounting to Rs 411 crore. Domestic institutions were net buyers for Rs 458 crore, according to the combined data for BSE and NSE reported by the exchanges.

Volumes in the cash market dipped to a three-month low, as day traders too kept away.

“Day Traders do give depth and volume to the market but due to the current liquidity problems they are not trading much,” said Mr Vishwas Agrawal, an independent analyst.

“Weak global cues were the key reason for the stock market fall today,” said Mr Gaurav Dua, Head of Research, Sharekhan Ltd.

Only one in three scrips advanced on BSE; 1,831 scrips of the 2,567 traded closed in the red, and only 661 in the green.