The Telegraph
Since 1st March, 1999
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Markets in a tailspin again

Mumbai, Oct. 27: Mugged by margins and damned by derivatives — the double-whammy sent stocks into a tailspin today, the first trading session after Diwali, as profit-hunters swooped down yet again to make a killing.

The selling wave that buffeted almost all shares on Dalal Street left the sensex adrift by 104 points at 4698.28 amid volatility triggered by fears of another margin hike and Thursday’s expiry of derivative contracts.

“The markets are extremely choppy. At higher ranges, there is selling pressure,” said Arun Kejriwal of Kejriwal Research and Investment Services. “Share prices seem to have run up faster than the results,” said another dealer, pointing to a packed week of second-quarter scorecards from bellwethers of the market.

Local institutions have been booking profits from the time the sensex hit 4800. One of the shares that were dumped was that of Reliance Industries, weighed down by jitters over Trai’s announcement of a penalty on Reliance Infocomm for offering limited mobility almost similar to those under cellular services.

Setting the stage for a unified licence policy, the telecom watchdog said Reliance would have to cough up a staggering Rs 1096 crore to convert its existing licence into one that allows it to offer all telecom services. Worse, it slapped a penalty of Rs 485 crore. The Reliance share plunged Rs 17.05 to Rs 458.20 on BSE. Hindustan Lever was another market lynchpin to have suffered at the hands of skittish investors, losing Rs 7.65 at Rs 180.25. Infosys Technologies had a torrid time as well, plummeting Rs 129.95 to at Rs 4443.55.

The sensex opened flat at 4802.07 but slid below 4700 to the day’s low at 4689.09 before ending at 4698.28. Losers outnumbered gainers by 2:1: the BSE saw 1106 shares that gave up value against 513 that ended higher.

In yet another move to rein in speculative trading in the market, the BSE clamped has increased its margins on 75 shares. They include stocks in the A specified category and some which are listed in the Z group.

Rupee slides

The rupee fell to 45.39 against the dollar, down 6.5 paise from Friday’s close of 45.33 due to a spike in month-end foreign exchange demand from importers and firms.

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