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Selloff sputter sparks slide in petro stocks
- The great Indian public sector divestment tale begins to turn stale as reform warriors let out the wail

Mumbai, Sept. 9: Fretting about the selloff stumble, markets vented their spleen by giving shares of public sector undertakings (PSU) a drubbing that sent the Bombay Stock Exchange (BSE) sensex into a 51-point tailspin.

Bharat Petroleum Corporation (BPCL) and Hindustan Petroleum Corporation (HPCL) took the brunt of the onslaught as investors who thought the government would overcome resistance to their sale hit back.

The market capitalisation of BSE’s PSU index shrunk a whopping Rs 11,130 crore in a single session — from Rs 1,58,414 crore on Friday to Rs 1,47,284 crore. Today’s knock to PSU shares is the hardest suffered by a sector in recent times. “The days of PSUs outperforming other sectors are now over,” said Ramesh Damani, a prominent broker on Dalal Street. “The markets have signalled their disappointment,” he added.

However, two key stock gauges went different ways: While the 30-share sensex, a repository of old-economy names, lost almost 51.64 points at 3089.47 points from 3141.11 points on Friday, the tech-laced Nifty gained 3.35 points at 998.55 against 995.20 on Friday. It was Wipro which kept the NSE index positive. The Azim Premji-controlled company regained ground, surging a heady 17.92 percent to Rs 1,428.95.

“Money will now rotate between other sectors, preferably infotech-enabled services and other technology stocks. That was already happening; investors moved out of PSU shares and scampered into tech scrips.

What vexed brokers was the selling avalanche in the two oil firms. If turnover numbers of Rs 260 for BPCL and Rs 270 crore for HPCL are correct, margin money worth Rs 40 crore may have to be coughed up on Tuesday.

BPCL and HPCL shares did claw back above Rs 200 levels after being pushed below that threshold in early trading. “They may look fundamentally appealing. But, the shares have not seen the bottom,” Kejriwal added. On the BSE, BPCL was down 20.43 per cent at Rs 202.10 and HPCL gave up more than 26 per cent at Rs 200.60.

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