The bounce, if any, will only be temporary
In line with all the Asian indices, the benchmarks back home too ended in the red. The Sensex, which opened 144 points lower at 18,897 ended in the negative for the third consecutive trading day while the Nifty, which opened 51 points lower at 5,709 ended in the negative for the sixth consecutive trading day. The NSE saw a volume of 56.64 crore shares.
In the morning session itself the indices hit their respective low, which was the lowest after 18 April 2013. Sensex hit a low of 18,766 while the Nifty hit a low of 5,683. From the lows, the benchmark tried recovering but ended in the negative. The Sensex closed 18,827 (down 214 points, 1.12%), while the Nifty closed at 5,699 (61 points down, 1.06%).
Among other news, the World Bank cut its global growth forecast. The world economy will expand 2.2%, less than a January forecast for 2.4% growth and slower than last year's 2.3%, the bank said in a report. It lowered its prediction for developing economies and sees the euro region's gross domestic product shrinking 0.6%. In contrast, forecasts were raised for the US and Japan, which were helped by fiscal and monetary stimulus.
Finance minister P Chidambaram speaking on the state of the economy today said he expects decisions to be announced in June that will accelerate economic reforms and spur investments in critical sectors and that steps government had taken in the last nine months have yielded results.
The government is also looking to pass a measure allowing cash-strapped power utilities to pass on the higher rising cost of imported coal to customers.
The Securities and Exchange Board of India (SEBI) raised the investment limits for foreign investors in government debt by $5 billion to $30 billion, but only long-term funds will be able to buy into that increased limit.
US stocks fell on Wednesday as traders extended a selloff driven by concern about central banks winding down their stimulus measures. The Federal Open Market Committee meets next week after the Bank of Japan this week left its debt-buying programme unchanged.
With the all the Asian indices ending in the red, Nikkei 225 fell by 6.35%. The European indices were trading in the red and so were the US Futures.
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