Market Analysis: 2008 all over again, but this time it's slower

There was complete mayhem in the market today with the BSE closin below the 16,000 mark and the Nifty falling below the psychological support level of 4800. As Santosh Nair, Editor, moneycontrol.com rightly puts it : “A murphy’s law guided the market today.” Everything that could go wrong has gone wrong with the markets today.

Moreover, the sharp decline was felt across all asset classes as the rupee closed at 21.15 against the dollar. Gold, silver and crude oil too were in the negative both domestically and internationally.

Indian shares provisionally ended down 2.56 percent on Monday, to their lowest close in more than six weeks, weighed by a plunging rupee, faltering domestic growth, sluggish policy and shaky global outlook. Even the mid ans small cap stocks took a pounding today.

According to Firstpost Investing Editor, Shishir Asthana, the markets are like 2008 levels again but the downside is just slower this time. Moreover, renewed fears of Euro and US debt crisis resulted in distressed selling across asset classes and the market is likely to extend losses after falling for eight consecutive days.

Among the losers, metal and banking stocks led the slide.JSW Steel was down 7.8 percent, SAIL fell by 6.6 percent, Sesa Goa was down 5.8 percent while Tata Steel fell by 3 percent due to rising commodity prices across the globe. Among the banking stocks, ICICI Bank fell by 4.2 percent at Rs 738, while SBI was down 3 percent at Rs 1,672.

In the retail sector Pantaloon lost around 12 percent whereas Suzlon Energy hit an all-time low today, closing 10 percent down.

Even though software companies have not performed so badly, Infosys said today that it may not be able to meet its dollar guidance in the third quarter and the stock was down almost by Rs 100 just two to three minutes before closing.

Another major cause of worry for investor is the rupee value which crossed the 52 mark today. However, it seems the RBI is unlikely to intervene. Moreover, the last time the central bank intervened to correct forex losses, India lost nearly $356 million and the intervention didn’t really help the industry in any way.

For more on the market’s performance, listen to our podcast on the market close below: