In what was one of the weakest trading sessions over the past twelve months, the BSE-Sensex shed around 4% in today's trade. It echoed the negative sentiment across global markets after the Federal Reserve warned that the US faces an extremely dire economic outlook. The indices opened below the dotted line and continued to bleed with each passing hour of trade. The Indian stock market finally closed the day deep in the red zone.
Thus, while BSE Sensex recorded a decline of around 704 points, losses on the NSE-Nifty came in at around 210 points. The Nifty dropped below the psychological level of 5,000. The BSE Mid Cap and BSE Small Cap indices were also trading extremely weak and both closed lower by over 3%. Almost 4 stocks declined for every one that advanced on the Sensex today. We believe that the knee-jerk reaction by investors should be seen as a long-term buying opportunity. Also, gold may see higher highs in the times to come.
Other Asian indices closed deeply in the negative today, whereas Europe is also seeing heavy losses. The rupee was trading at Rs 49.2 to the dollar at the time of writing, hitting a two-year low against the greenback.
Food inflation in India slowed to its lowest level in 7 weeks. But does this reduction provide much-needed relief to the Indian population, or will it make the Reserve Bank of India roll back on its aggressive stance? Well, maybe not. Food inflation fell to 8.84% in the week ended September 10, from 9.47% in the previous week. However, prices of most commodities continued to remain high, with the exception of wheat. According to a leading business daily, the weekly fall in inflation is due to the"'high base effect." Food inflation was above 16% in the corresponding period last year. While, wheat costs reduced, the prices of staple items, like onions and potatoes, became dearer by 29% and 14%, respectively. Overall vegetable costs increased by over 12%.
HCL Technologies recently opened a new global delivery center in Redmond, Washington. Its initial investment of US$ 4M is expected to create over 400 jobs in the Seattle area over the next two years. The new center is in line with HCL's global expansion plans, and focus on software product development, test engineering and business-critical platform development. The company is looking at working with the Washington State Department of Commerce, and several universities in order to help hire local talent. The stock closed over 5% lower in an extremely weak market.