Mumbai, Oct. 3: The markets felt the jitters as the members of the Cabinet squabbled over disinvestment of BPCL and HPCL, but gained some of their composure from Prime Minister’s commitment to reforms.
The fall in values of index heavyweights pushed the BSE sensex to a year’s low, but technology stocks bucked the trend as operators switched positions from cyclical stocks to new-economy companies.
State-run firms nudged higher after Prime Minister Atal Bihari Vajpayee stood up for the government’s privatisation, which began to falter last month with rising opposition to the sale of two huge and profitable oil companies.
The sensex touched the year’s low of 2938.06, even as the markets opened on a bright note taking strength from the Prime Minister’s positive stance on the disinvestment issue.
The sensex opened higher at 2963.61 but plummeted by 21 points to 2938.06 due to heavy selling in heavy-weight shares of Reliance, Hindustan Lever, Bajaj Auto and Dr Reddy’s Laboratories.
The 30-issue benchmark Bombay share index was marked down by 0.73 per cent at 2,938.06 points, its lowest close since October 11, 2001.
Indications are that a few bulge bracket foreign funds are reducing their holdings in Indian stocks, a dealer affiliated to a FII broking house said. However, none hazard a guess on the depth of the falling share prices.
“It is like catching a falling knife,” a leading broker rued, criticising the government’s shifting stand as the Union ministers form groups to voice their different opinions on the disinvestment process. Incidentally, today’s southward movement was amplified by the drop in volumes to 7.4 crore shares from Tuesday’s 7.74 crore shares.
Not surprisingly, Reliance Industries, the country’s biggest petrochemicals maker, extended losses after the company reduced certain product prices on Tuesday.