Dalal Street fell 3.2 per cent on Monday to its lowest close in more than three months as bleak economic data and sliding world markets added to the gloom,while the rupee slumped to record lows. The 30-share BSE Sensex dropped 285 points to 8,607.08,its lowest close since November 20. The 50-share NSE Nifty Index closed down 3.22 per cent at 2,674.60 points.
Manufacturing activity in India shrank for the fourth straight month in February as the global downturn hurt demand and soured business sentiment,a survey showed. Data showed Indias exports in January fell an annual 15.9 per cent to $12.38 billion,a fourth straight loss as the global slowdown shaved off demand for Indian goods. Market sentiment was also dampened by consistent FII outflows,which amounted to more than $1.6 billion in January and February this year.
The weak economic data would worsen the markets plight in March,which was usually volatile due to unwinding ahead of the financial year end. The rupees tumble and coming general elections would enhance uncertainties and weigh on foreign investment,bankers said. Brokers said the market,however,recovered from the days low of 8,563.52 as domestic institutional investors absorbed part of FII unloading.
Bank shares were worst-hit on heavy sell-offs sparked by fears of defaults in the ongoing economic slowdown.