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Stocks seen subdued as terror revisits Mumbai; GDP data eyed

Posted by Manish Agrawal on Friday, 28 November, 2008

MUMBAI: Stock markets will resume trade on Friday after Mumbai was under siege of terrorist attacks. However, the sentiment will remain jittery after the dramatic turn of events that unfolded in the last 35 hours. 

Market regulator SEBI has asked stockexchanges to be ready to begin trading on Friday but will take a final call on resumption just before the starting time. Also, F&O contracts for the November series will expire today. 

In an attack aimed at destabilising India’s financial centre, more than 10 terrorists stormed Mumbai’s Taj Mahal Palace and Towers Hotel in Colaba and Hotel Trident at Nariman Point and started firing indiscriminately. The terrorists also took hostages at the two hotels including foreigners. Fierce firing is still on at a Jewish residential building Nariman House. 

According to reports, the terror strikes left over 100 people have been killed and over 300 injured. More than 10 police officers died in the ensuing encounter with terrorists including top officials Hemant Karkare, Chief of the Anti-Terrorist Squad and encounter specialist Vijay Salaskar. The army and navy moved in to carry out flush-out operations at the two hotels. Throughout the day, explosions and gunfire were heard as commandos tried to free hostages trapped by the militants. 

Global cues, however, are supportive. Asian markets edged higher, spurred by gains in commodity stocks, on hopes that government steps to pull the global economy out of recession will boost demand for raw materials. The Nikkei was up 0.5 per cent, Hang Seng added 1.98 per cent and S&P/ASX climbed 2.71 per cent. US markets were shut for Thanksgiving holiday. 

Meanwhile, inflation fell to a six-month low, providing more room to the central bank to cut interest rates to spur flagging economic growth. Inflation edged lower to 8.84 percent for the week ended November 15 from 8.90 the previous week. 

GDP data for the July-September quarter is also expected Friday. The economy probably grew an annual 7.3 percent in the July-September quarter — its slowest pace in nearly four years. 

On Wednesday, Indian stock markets ended sharply higher as traders covered short positions in private sector banks and oil&gas stocks. The market opened on a firm note but turned choppy and gave away all the gains in the early half due to lack of conviction and ahead of November F&O expiry Thursday. Traders chose to remain on the sidelines also due to lack of direction. 

Bombay Stock Exchange’s Sensex closed at 9,026.72, up 331.19 points or 3.81 per cent. The index touched an intra-day high of 9061.72 and low of 8658.53. National Stock Exchange’s Nifty ended at 2752.25, up 98.25 points or 3.7 per cent. The 50-share index hit a high of 2762.60 and low of 2643.35. 

Source: The Economictimes.com

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