The stock markets lost lustre after overnight brief rally and the benchmark Sensex slumped by over 380 points on selling pressure, triggered by aggravating fears of recession in the US. The Bombay Stock Exchange 30-issue Sensex barometer resumed sharply lower at 17,515.62 points and remained in negative terrain throughout the day and touched a low of 17,294.73 points. The key index finally closed the day at 17,349.07 points, a steep fall of 385.61 points, or 2.17 per cent, from its previous close of 17,734.68 points. Similarly, the broader S&P CNX Nifty of the National Stock Exchange also declined by 81.05 points, or 1.56 per cent, to 5,110.75.

The Dow Jones Industrial Average and the Nasdaq Composite Index on Thursday dipped by 143 and 27 points respectively after announcement of a weak US mid-Atlantic manufacturing data, the lowest level since the 2001 recession.

As a result, the spill-over effect was seen in Asian markets on Friday. Barring Taiwan, most of the other indices in the region ended with losses by an average of 0.2 per cent to 3.5 per cent.

Marketmen said covering long positions ahead of the expiry of February contract on coming Thursday also weighed on the market sentiment. Banking, IT and refinery counters suffered a sharp setback on heavy selling and ended with sharp losses.

Playing safe

Retail investors preferred to sit on the fence or booked profits to play safe in the prevailing uncertain scenario as they remained clueless about market’s future direction. According to brokers, the next week could be crucial for the market as Finance Minister P Chidambaram is going to present the Union Budget on February 29. The market breadth was negative with 1,766 stocks ending with losses while 961 closing with gains.

The trading volume declined further to Rs 4,768.21 crore from Rs 5,410.60 crore on Thursday. Reliance Power was the top traded share with the highest turnover of Rs 524.28 crore followed by RNRL (Rs 219.82 crore).