Sensex crash by more than 600 points, sinks below 14K mark!!

Markets were completely under rough weather after free fall in US markets, crude at new all-time high and likely susequent impact on Indian Inflation has spooked the markets. Bears smashed out bulls. It was a dreadful opening session for July series as well. Rate sensitives like auto, banking and realty stocks have taken huge beating. Infrastructure sectors like capital goods, telecom and power also hammered a lot. All indices witnessed huge selling pressure. The Sensex has lost over 650 points and the Nifty 195 points during the day.
Main reason behind today's fall was sharp sell off in US markets on the back of rising crude oil price and disappointing earnings from tech giants.The Dow Jones fell more than 350 points in Thursday's trade to close at its lowest level since September 2006. Crude Futures has hit new all-time high of $141.71 a barrel on the NYMEX during the day.
Purvin & Gertz said reduced interest rates and weak dollar have led to crude rally. He also said crude is likely to gain if ECB hikes rates in July.
The Sensex closed at 13760, down 661 points and the Nifty at 4125, down 191 points.
Inflation for the week ended June 14 has risen further at 11.42% as against 11.05% in earlier week. Inflation for April 19 revised to 8.23% versus 7.57% earlier. Experts believe that inflation may increase further if crude oil prices stay at these levels.
HSBC spokeperson says that don't expect inflation will have peaked, may go upto 15%. They also see double digit inflation to stay for about 9 months and are cautious on the growth rate outlook for FY10.
Deutsche Bank says it's not done on the rate hike front if oil prices stay at current levels.
Ajay Shah of the National Institute of Public Finance and Policy, said the Reserve Bank of India's move is in the right direction and that policy rate has to be higher. He thinks the monetary policy is not very effective at combating inflation in India. Shah said, "We are in for a rough ride on inflation, and there will be further rate hikes."
Turnover traded for the markets stood at Rs 78000 crore. This includes Rs 13000 crore from NSE Cash segment, Rs 60000 crore from NSE F&O and the balance Rs 5500 crore from BSE Cash segment.
On the global front, Asian markets ended sharply lower following weak cues from US markets. Shanghai fell -5.3%, Nikkei -2.01%, Taiwan Weighted -3.4%, Hang Seng -1.84% and Kospi down 1.93%. European markets were trading weak, at the time of writing market report. FTSE 100 fell 0.5%, CAC 40 -1.2% and DAX down 1.6%.

Source: Moneycontrol