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Day Four of market cool-off

Mumbai, Oct. 23: In a four-session string of losses, the sensex crashed by about 93 points in line with a sharp downslide in stocks in volatile trading activity on the Bombay Stock Exchange today. Stocks fell on the back of sustained and heavy selling by domestic mutual funds as well as some hedge funds.

After an initial feeble resistance that helped the market rise to the day’s high of 4755.94, the BSE benchmark 30-share index gradually fell under constant selling pressure and ended at 4648.41 against yesterday’s close of 4741.20, netting a sharp fall of 92.79 points or 1.96 per cent.

However, India fared better than other Asian markets, say dealers after a nerve-wracking day that saw highly volatile trades.

In Japan, the Nikkei fell 5.09 per cent, while the Hang Seng fell a whopping 500 points, and ended nearly 5 per cent lower, while Singapore’s Strait Times fell 38 points to 1732. Even the markets in Korea and Taiwan were down.

“The correction will push out the weaker players from the marketplace,” said a dealer affiliated to an institutional brokerage. While the downtrend may have looked drastic it was not all that bad. Losers outpaced gainers by a small margin of 850 to 659.

“The outlook remains positive on the fundamental side. The only negative factor weighing the markets down are the huge outstanding and the high carry forward charges in certain stocks,” Dhiraj Sachdev, associate vice-president of ASK Raymond James Securities, said.

Marketmen aver that FII flows remain positive, a factor that saw the index nudging the magic mark of 5000.

The Bombay marker is still up about 60 per cent from a six-month low in late April. This month alone, the foreign investors have invested close to a billion dollars. The derivative contracts end by October 30, and wary speculators have been unwinding their positions.

Among the major losers were Reliance Industries, State Bank, Grasim, BSES, Cipla, Dr Reddy’s, Hero Honda, Hindalco, HLL, Infosys Tech, ITC, L&T, Ranbaxy, Satyam Computers, Tata Motors, Tisco and Zee Telefilms.

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