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Markets fall sharply but begin recovery mid-afternoon

(Second Lead)
Mumbai | September 22, 2008 3:35:07 PM IST

Indian equities markets opened strong Monday, slipped into the red within 20 minutes into trading and
fell further before beginning to recover mid-afternoon and should close flat or slightly higher, analysts

The 30-share benchmark sensitive index (Sensex) of the Bombay Stock Exchange (BSE) opened about
180 points higher and then dipped by nearly 342 points by mid-afternoon before coming back to the
recovery path.

At around 2.15 p.m., the Sensex had recovered almost completely and was at 14,023.25, just 19.07 points
or 0.14 percent down from its previous close last Friday.

The broader based 50-share S&P Nifty index of the National Stock Exchange (NSE) showed a similar
trend. It opened strong to shoot up by nearly 50 points against its previous close at 4,245.25 last Friday.

It then fell by nearly 95 points by mid-afternoon before starting to recover and at around 2.15 p.m. was
ruling at 4,231.00, just 14.25 points or 0.34 percent down.

"There is little clarity on news such as Goldman Sachs and Morgan Stanley announcing conversion into
commercial banks, and US government announcing a $700 billion fund to buy illiquid assets," said
Jagannadham Thunuguntla, head of capital markets in India's fourth largest share brokerage firm SMC

"The market is directionless and traders are taking a breather with no clear strong buying or selling
trends," confirmed portfolio strategist and US-trained chartered financial analyst Manoj Krishnan of
Delhi-based Price Investment Management and Research Services.

"Traders are trying to evaluate the implications of the end of the US investment banking era which has
completely changed the landscape of Wall Street," said Thunuguntla.

"Now that the markets have begun to recover we have already touched the day's low and the Sensex
should close flat or with a small gain of about 50-100 points," Krishnan said.

At around 2.15 p.m. the BSE mid cap index was ruling at 5,232.39, up 3.61 points or 0.07 percent. The
BSE small cap index at 6,210.05 was down 5.94 points or 0.10 percent The recovery trend shows that the
last hour of trading will show a buying trend although it may not be very strong, analysts said.

"That the markets are recovering after the opening of the European markets is a good trend and we should
finish in the green," Krishnan said.