Sensex plunges 5%, but part of fall was due to profit-booking
MUMBAI: The stock markets don’t seem to believe in change, a la Barack Obama. The Bombay Stock Exchange Sensex tumbled for the first time since Diwali, even as Americans were voting their first Afro-American president to office. The index fell 511 points, or 4.8%, to close at 10,120, in line with its habit of giving the thumbs down to Democratic presidents in the US.
The index had ended in the red when Bill Clinton won in 1992 and 1996. It gained on both occasions when George Bush won in 2000 and 2004.
Says Shahina Mukadam, director, Varun Capital Market Advisory: “Obama has made it clear that there will be more regulation for Wall Street. He has made it clear that main street is not going to be made to pay for Wall Street.”
However, she did not attribute all of Monday’s losses to the Obama effect. “Over the last couple of days we have seen a lot of short-covering. This is probably the profit-booking that followed.”
Raamdeo Agrawal, managing director, Motilal Oswal Securities, says the market’s fall is no surprise. “The run up in the markets till Tuesday had already factored in an Obama victory. So there was no surprise there.”
