ONE FLU OVER BULLS’ NEST Sensex worst hit in Asia

INDEX SLIPS 370 POINTS

 NERVOUS investors worldwide dumped shares on Tuesday, worried that the ongoing swine flu epidemic could choke the first shoots of a recovery in the global economy.
    Adding to the gloom were reports that leading US banks may have to raise more capital, after failing to clear stress tests conducted by the government.
    India was the worst performer among key Asian markets, with the Sensex and Nifty falling over 3%. Key European markets fell between 2% and 3%.
    Brokers said the latest global developments merely provided an excuse for the correction in India as the market has risen too much too fast, without any major improvement in economic fundamentals. They say share prices are likely to consolidate till the results of the general elections are announced in May.
    The Sensex closed at 11371.85, down 370.10 points, over the previous close. The Nifty shed 107.65 points to close at 3362.35.
    "A correction was to be expected. With respect to global triggers, the US bank stress test and swine flu may or may not impact Indian market in real terms," Reliance Mutual Fund CEO Sundeep Sikka.
Traded turnover on both exchanges combined was around Rs 99,000 crore, due to rollover of April derivatives contracts to May. Worst hit were realty, banking and metal shares, with the respective BSE sectoral indices shedding 5-6%. These three sectors have been the most volatile in the past couple of months, due to a similar trend in liquidity, property prices and global metal prices.
    Dealers expect the market to see wild swings on Wednesday because of the expiry of current month futures and options contracts. They also said traders were likely to keep outstanding positions to the minimum because of the extended weekend and the abrupt souring of sentiment in global markets.
    Stock exchanges in India will remain closed for trading on Thursday because of polling in Maharashtra, and then again on Friday on account of World Labour Day.
    All Sensex stocks closed in the red. Prominent losers included Tata Steel, Tata Motors, HDFC, ICICI Bank, Sterlite Industries, Reliance Communications and DLF, which fell between 6% and 8%. IT and automobile shares fared slightly better, falling to a lesser extent. Both overseas as well as domestic institutional investors were net sellers on Wednesday. Foreign funds net sold shares worth Rs 256 crore while local funds net offloaded shares worth Rs 202 crore.

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