Sensex falls 150 points after Wall Street sinks

The BSE Sensex dropped nearly 150 points or 0.8 per cent on Thursday following the sharp fall on Wall Street overnight. The broader Nifty traded 53 points lower at 5,707 at 09.15 a.m. The rupee too traded lower against the dollar at 54.57.

"The MSCI World index has broken critical supports. A Nifty breakout looks suspect now. The Nifty has support at 5,650-5,680 gaps... Stop losses on longs should be on intraday basis," independent analyst Sarvendra Srivastava said.

Global markets tumbled on the back of growing concerns about the fiscal cliff in the U.S. Hours after President Obama defeated Republican challenger Mitt Romney in a cliffhanger election, the Wall Street saw its sharpest sell-off of the year. The Dow Jones industrial average plunged 2.4 percent to 12,932.73.

Fitch Ratings said that the U.S. government's top 'AAA' rating would be at risk if Congress and the president did not immediately forge an agreement to avoid the fiscal cliff. If a deal isn't reached by January 1, tax increases and government spending cuts to the tune of $800 billion automatically take effect. Some economists say such a withdrawal of fiscal stimulus has the potential to throw the world's biggest economy back into recession.

Asian markets mirrored the sharp decline in U.S. stocks. Japan's Nikkei 225 index shed 1.65 percent.

"Had the Republicans won, there would have been more cheer in equity markets... Whether it is Romney or Obama, problems with respect to fiscal cliff stays," Gaurang Shah of Geojit BNP Paribas said.


(With inputs from AP)