Sensex below 12000, lowest in 2 years

The stock market cracked under pressure from the boiling global financial crisis, with the barometer index tanking 725 points to trade at its lowest level in two years as foreign funds left in search of safer investment havens.

The 30-share stocks barometer Sensex, which lost 529.35 points in the previous session, plunged by another 724.62, or 5.78 per cent to close at 11,801.70.

Funds indulged in selling in consumer durables, metals, capital goods and realty stocks. The Sensex touched the day's low of 11,732.97 and a high of 12,284.49 points.

The slide came even as the subprime lending-induced crisis threatened Europe, prompting Germany to guarantee all private bank accounts worth 568 billion euros to prevent panic withdrawals. Questions about the effectiveness of America's USD 700 billion bailout package for its banks also negatively influenced the sentiment.

Analysts, however, said that the market may bounce back tomorrow as the Reserve Bank and SEBI on Monday announced measures to ease liquidity and trading norms in derivative segment respectively.

The wide-based National Stock Exchange index Nifty dropped by 215.95 points, or 5.66 per cent at 3,602.35 after dipping to a low of 3,581.60 during the session.

In Asia today, China was down by 5.23 per cent, Hong Kong by 4.97 per cent, Japan by 4.25 per cent, Singapore 5.61 per cent, Korea 4.29 per cent and Taiwan 4.12 per cent. European markets also resumed sharply lower.

The market seemed to be bear trap as the main driver, Foreign Institutional Investors (FIIs) pulled out a whopping Rs 1,662.26 crore on October 3 as per provisional data.