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Roller coaster ends with a thud

Mumbai, Jan. 20: Stocks dived at the close of a roller-coaster session that saw the BSE sensex shed 142 points on fears that one of the most popular channels for foreign institutional investors (FIIs) would be choked.

The selloff capped a day of wild swings in the trading ring during which the 30-share index had hit a high of 6130.09. The reason was the government’s decision to relax the norms for external commercial borrowing and foreign currency bonds. The barometer settled at 5922.11, down from 6064.10 on Monday.

The brunt was borne by banks and auto firms as investors worried about a drop in funds from FIIs, who have played a key role in driving up stocks since May 2003.

The 30-issue BSE index finally closed 2.34 per cent at 5,922.11 points, handing back the 2 per cent gain made on Monday. “The talk of a ban on participatory notes has rattled the markets since the bulk of foreign investments have come through this medium,” a dealer said.

“It has been a roller-coaster ride for the past few days. On Monday, shares moved down and then went up. Today of course, it was the other way round,” Arun Kejriwal of Kejriwal Research and Investment Services.

FIIs sold local shares worth Rs 85 crore on Friday, while their purchases on Monday were just a bit more than sales. Today, they were believed to be heavy sellers in index-based counters. Foreign investment trends for Tuesday will show they sold more than they bought.

Analysts, however, say every low-point presents the chance of renewed purchases as the India Story is not dying down.

On Dalal Street, losers outnumbered gainers by 3:1 on a volume of 18.5 crore shares against 16.1 crore the previous day.

Among the major losers this evening were Syndicate Bank, which lost 7.6 percent at Rs 39 after its poor third-quarter earnings show. This pushed down other banks, including the State Bank of India, 5.6 per cent to Rs 622.60; Canara Bank lost 6.7 per cent at Rs 148.85.

However, the strong showing by private sector UTI Bank, whose third-quarter net profit vaulted 45.4 per cent, saw its share gain more than 9 per cent to Rs 168.95.

Bharti Tele-Ventures, the leading GSM cell service provider, jumped over 5 per cent to Rs 118.40 after reporting a consolidated net profit of Rs 161 crore. Bajaj Auto raced ahead by Rs 14.55 to Rs 1072.05, HPCL rose Rs 1.35 to Rs 438.85 and Digital Global Rs 4.55 to Rs 784.70.

Among the losers, Tata Steel, Reliance, Infosys, Lever and Tata Motors faced increased pressure during the last 30 minutes of the session. Reliance dropped Rs 13.45 to Rs 572.40, Tata Motors by Rs 23.35 to Rs 486.10, Tata Steel by Rs 19.05 to Rs 438.15, BSES by Rs 13.15 to Rs 524.50, Grasim by Rs 28.85 to Rs 1119.75 and Infosys by Rs 109.90 to Rs 5391.65.

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