The Telegraph
Since 1st March, 1999
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RIL, Lever lead sensex slide

Mumbai, Oct. 28: Stocks were walloped again today in a selloff that sent the BSE sensex tumbling 41.12 points and pounded the Reliance-Lever duo to new lows.

The two companies that account for almost a quarter of the key index in terms of weightage bore the brunt of sales by foreign institutional investors (FIIs) upset with stop-go reforms and wobbles in disinvestment.

The 30-share index shed 1.43 per cent, or 41.12 points, to close at 2,834.41 points in its fifth straight day of losses. It has lost a whopping 5.8 per cent since last Tuesday. The broad-based BSE-100 index dipped 18.95 points to end at 1413.64 from its previous close of 1432.56.

“Every decline tests a new bottom and, as a consequence of that, confidence in the market is eroded,” a slide-weary dealer affiliated to a leading mutual fund said.

Many in the market say foreign funds are sending out to signal to the government that they are unhappy with the way reforms have unravelled in recent months.

FIIs sold shares worth more than Rs 575 crore in October — the highest monthly outflow in more than two years — after injecting close to Rs 2816 crore in January-March. Most analysts reckon that the aggressive selling has been prompted by the government’s abrupt retreat on its privatisation programme.

Much of the angst was poured on Hindustan Lever and Reliance Industries, two shares that have the potential to make or mar the fortunes in a single session.

The Lever stock shed a staggering 5 per cent at Rs 152.80 rupees, adding to last week’s fall of 4 per cent on Friday.

Reliance Industries, the country’s largest petrochemicals maker whose results are due on Thursday, dropped 1.81 per cent to Rs 219.30. Analysts said sluggish demand for petrochemical products is likely to tell on its earnings in the quarter ended September.

ACC firmed up 4 per cent initially, but shed most of its gains as hopes of an open offer receded. Polaris was savaged, giving up 15 per cent at Rs 168.50 on poor results. Market watchers said other companies that disappointed investors with their quarterly numbers — Rolta, BSES, GSFC and Madras Cement — also hit the market.

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