Mumbai, March 18: Stocks went into a tailspin again as mutual funds rushed to sell their kitty of shares to return investors’ cash. The Bombay Stock Exchange (BSE) sensex nose-dived 121 points to 5414.94 — much of the losses inflicted in the dying hours of trade.
Affluent investors worsened the March misery, brought on by companies and individuals running into a tax payment deadline at the end of the month.
“It’s typical in March, to face this kind of weather,” a dealer said. The consolation was that shares plunged on low volumes, an indication that there were fewer players in the market. “It’s not a wave yet,” dealers said, adding there was still value left in some of the shares.
David Graham, managing director of Merrill Lynch Investment Managers, appeared to share the perception, as he told leading fund managers in a presentation that Indian stocks were good bets at this juncture.
Among the losers were Reliance Industries, ITC and Bajaj Auto. In the stampede of sellers, there were some discerning investors making the best of the opportunity to pick up shares at bargain-basement prices.
The benchmark 30-share index swung in a relatively small range of 60 points, but lost ground heavily after 3 pm. Local funds resorted to all-round selling, pushing the sensex to 5414.94, down 120.75 points, or 2.18 per cent, against Wednesday’s finish of 5535.69. The BSE barometer shed 180 points on March 15, but steadied to a small degree during the past two sessions.
So intense has been the sale of shares by private mutual funds that it overshadowed the sustained FII buying in the past three sessions. The selling today was more pronounced in Reliance, Tata Steel, Tata Motors, State Bank, MTNL, L&T, HPCL and Bajaj Auto, besides in IT majors Infosys, Wipro and Satyam Computers.
Infosys lost Rs 107.80 at Rs 4924.90, Satyam Rs 9.05 at Rs 292.45, Reliance Rs 21.60 at Rs 559.15, HPCL Rs 22.65 at Rs 470.10, Tata Steel Rs 10.90 at Rs 384.60, Tata Motors Rs 16.70 at Rs 450.70 and Bajaj Auto Rs 27.35 at Rs 827.45. Bucking the trend were ONGC, Dr Reddy’s and HDFC, which scored sharp gains on moderate buying support.
The specified group of BSE was awash in red, with 156 shares, including 26 from the indices, suffering sharp to moderate losses; 34 others finished with gains.
The volume of business was relatively lower at Rs 2,254.23 crore against Rs 2,259.02 crore on Wednesday. Reliance was the most active counter with the highest turnover of Rs 392.33 crore. It was followed by Tisco (Rs 158.06 crore), ONGC (Rs 140.17 crore), Maruti Udyog (Rs 133.25 crore) and State Bank (Rs 130.16 crore).
The Securities and Exchange Board of India (Sebi) today said market intermediaries can now make consolidated payment to obtain unique identification numbers (UIN) for employees and their dependants. The dependant minor children of the natural persons would not be required to obtain the number, Sebi said in a notification.
The market intermediaries had made representations to Sebi for simplifying the cumbersome process for preparing individual demand draft for each employee to secure the UIN, the regulator said. Similarly, clarifications were also sought on whether dependent minor children of the related persons had to acquire unique identification numbers.
The rupee closed at 45.24 against the dollar, almost unchanged from the previous day. It scaled a high of 45.23 early in the day on foreign fund inflows, and dipped to a low of 45.26 on dollar demand from state-run banks, possibly on behalf of the Reserve Bank, dealers said.
Steady trade and investment inflows and a weak dollar overseas continued to give the rupee firm support, but reports of central bank intervention through public sector banks contained the gains and kept the spot trade within a narrow range, a forex dealer said.
State-owned banks buy dollars on behalf of the Reserve Bank to soften the rupee for the sake of exporters, who are paid for their goods in foreign exchange.