It was a weak day for the markets accompanied by volatility and unceratinity on account of subprime mortgage worries. The markets opened with a gap up of 200 points but slipped in red on weak global cues, swinging by nearly 500 points.
The fall was inline with the Europe meltdown on news that BNP Paribas has freezed 3 asset backed funds on US subprime losses. BNP Paribas SA, France's biggest bank, halted withdrawals from three investment funds because it can't "fairly'' value their holdings, as concern over US subprime mortgage losses roils credit markets. This immediately raised concerns that the problems of the US subprime mortgage market are still spreading.
Selling was seen in scrips across sectors. Leading the downtrend were IT, oil & gas and FMCG stocks. The broader markets also sild and ended lower.
Sensex was down 207.83 points or 1.36% at 15100.15, and the Nifty down 58.90 points or 1.32% at 4403.20.
The BSE Midcap Index ended at 6,559.58 down 1.6% and BSE Smallcap Index ended at 7,964.12 down 1%.
Neeraj Deewan of Quantum Securities is of the view, "We have been recommending our clients to stay away from the market for sometime and not do any trading in this market because the market is highly volatile and it depends on the global market; okay in the morning and then some news flow comes in from the global market then fall about 400 points down."
He further added, "So there is no point trading in this market definitely stock specific, I think even for a medium-term there is a good opportunity to buy stocks, as the result season has just finished. So having seen the results, we know the companies which are doing better. So be stock specific when picking your stocks."
According to Deven Choksey of KR Choksey Securities uncertainty is playing its role at this point of time. "I think such kind of situation is not good for the market and this uncertainty would mean that people would stay nervous for some time," he said. Choksey added that as of now, nothing has changed as far as the market is concerned except the sentiment. "In my viewpoint stability will only make sentiments better. Till such time, it is not something which one can calculate where we are heading. But largely, the fundamentals are in place, so we are not too worried," he explained.
Commenting on the mood among traders, Choksey said, "Those who are long stay long; they don't want to easily get out of the market. Those who have taken calculative positions certainly are not interested in getting out of the market so easily. At the same time, most of those people who were short in the last three days of upsides did the short covering as well. So to a greater extent, I think there is reluctance as far as the short going is concerned in this market from the traders."
"In last three days, the way markets has moved up people didn't get much of a chance to get into the market in a big way because everyday it would open with a gap. So to a certain extent, the situation at this point of time is not asking for an additional mark to market margin," said Choksey.
A sub-prime lender is one who lends to borrowers who do not qualify for loans from mainstream lenders. Some are independent, but increasingly they are affiliates of mainstream lenders operating under different names. Sub-prime lenders seldom if ever identify themselves as such. The only clear giveaway is their prices, which are uniformly higher than those quoted by mainstream lenders.
The fall was inline with the Europe meltdown on news that BNP Paribas has freezed 3 asset backed funds on US subprime losses. BNP Paribas SA, France's biggest bank, halted withdrawals from three investment funds because it can't "fairly'' value their holdings, as concern over US subprime mortgage losses roils credit markets. This immediately raised concerns that the problems of the US subprime mortgage market are still spreading.
Selling was seen in scrips across sectors. Leading the downtrend were IT, oil & gas and FMCG stocks. The broader markets also sild and ended lower.
Sensex was down 207.83 points or 1.36% at 15100.15, and the Nifty down 58.90 points or 1.32% at 4403.20.
The BSE Midcap Index ended at 6,559.58 down 1.6% and BSE Smallcap Index ended at 7,964.12 down 1%.
Neeraj Deewan of Quantum Securities is of the view, "We have been recommending our clients to stay away from the market for sometime and not do any trading in this market because the market is highly volatile and it depends on the global market; okay in the morning and then some news flow comes in from the global market then fall about 400 points down."
He further added, "So there is no point trading in this market definitely stock specific, I think even for a medium-term there is a good opportunity to buy stocks, as the result season has just finished. So having seen the results, we know the companies which are doing better. So be stock specific when picking your stocks."
According to Deven Choksey of KR Choksey Securities uncertainty is playing its role at this point of time. "I think such kind of situation is not good for the market and this uncertainty would mean that people would stay nervous for some time," he said. Choksey added that as of now, nothing has changed as far as the market is concerned except the sentiment. "In my viewpoint stability will only make sentiments better. Till such time, it is not something which one can calculate where we are heading. But largely, the fundamentals are in place, so we are not too worried," he explained.
Commenting on the mood among traders, Choksey said, "Those who are long stay long; they don't want to easily get out of the market. Those who have taken calculative positions certainly are not interested in getting out of the market so easily. At the same time, most of those people who were short in the last three days of upsides did the short covering as well. So to a greater extent, I think there is reluctance as far as the short going is concerned in this market from the traders."
"In last three days, the way markets has moved up people didn't get much of a chance to get into the market in a big way because everyday it would open with a gap. So to a certain extent, the situation at this point of time is not asking for an additional mark to market margin," said Choksey.
A sub-prime lender is one who lends to borrowers who do not qualify for loans from mainstream lenders. Some are independent, but increasingly they are affiliates of mainstream lenders operating under different names. Sub-prime lenders seldom if ever identify themselves as such. The only clear giveaway is their prices, which are uniformly higher than those quoted by mainstream lenders.
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