Sensex dips over 700 points on grim outlook for US economy

Mumbai - 22 Sep 2011: The 30-share BSE benchmarksensexnosedived by over 700 points during mid-session on day on panic selling across sectors, on grim economic warning by the US Fed over theAmerican economyamid worries about global slowdown.

At 15.41 hrs, Sensex was down 704 points to be at 16361.15 and theNiftywas down 209.60 points to be at 4923.65.

After a weak opening, sensex meltdown to over 555 points during the day to be at 16,509.49 at 1415 hrs as stocks led by realty, metal and refinery segment suffered losses of up to four per cent.

The broad-based National Stock Exchange index Nifty plunged by 161.25 points to below the 5k mark at 4,972.

IT stocks also plunged amid the rupee falling to over two-year low against the US currency. IT companies get over 80 per cent of their revenue from the US and Europe markets.

Although the weak currency boosts their earnings in rupee terms, a slowdown in exporting markets increases chances of big hit in business prospects.

Brokers said the selling pressure gathered momentum as the Federal Reserve cited risks to the US economy, amid ongoing debt troubles in the euro zone nations and continuing depreciation of the rupee that makes imports costlier.

source: TOI