Market crashes – Nifty down 136 pts, Sensex dives 405 pts

Main indices crashed in the second half of trade. Sensex lost 406 ponts whereas NIFTY lost 136 points in. As per the article published in ‘Times of India’ quoting CAG’s report indicating huge loss to nation. During the period 2004-2009 coal blocks were allotted at substantially lower price causing loss to the tune of 10.7 lakh crore to the exchequer coupled with weak Global market played havoc in Indian market. Panic selling in the heavyweight such as Reliance Industries (down 4%),  Tata Steel (down 5%), Reliance power (down 6.5%) were witnessed.

Government has failed to reinstate the investor confidence after a series of scams that have been exposed in recent past. The breadth of market was so negative that out of 50 stocks NIFTY index 48 were trading in red.

Today’s market sell off also attributed towards the fact that UPA is struggling in carry out very important reform agenda due to coalition pressure. New railway minister Mr. Mukul Roy rolled back fare hike announced by former railway minister Mr. Dinesh Trivedi.

Market outlook for next trading session is extremely negative. Friday being last trading day in week will also force traders to square-off trading position and not to carry forward to next week. Negative signal from RBI will also weigh on market RBI dy. governor today clearly stated that liquidity will remain tight until inflation eases substantially. Government’s borrowing program will also put pressure on RBI’s rate cut action.