The Telegraph
Since 1st March, 1999
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Stocks still in sellers' clasp

Mumbai, Jan. 6: The selling wave in the markets ebbed today, but was still strong enough to wash away another 91 points from a sensex adrift in US interest-rate fears.

At its close of 6367.39 points, the benchmark index surrendered an additional 1.42 per cent over its overnight finish, hemmed in by sparse FII stock purchases and lack of enthusiasm from local market movers.

'We are in for volatile times,' warned Arun Kejriwal of Kejriwal Research and Investment Services. He expects the raft of corporate results due next week to make markets choppier and small investors more vulnerable.

US interest rates affect local bourses because they sway global funds looking for the most profitable places to park their cash. In recent weeks, there has been no conclusive evidence that they were big sellers, though hedge funds have dumped stocks heavily in the futures segment.

Dalal Street was witness to a roller-coaster that saw the sensex gyrate in a range of 156.71 points ' between 6481.23 and 6324.53 ' before winding down to 6367.39 at close. Dealers said the sensex' plunge from the dizzy new-year peaks of over 6600 forced exchanges to call for higher margins, jolting traders used to a precautionary response.

'The hammering on Wednesday had many investors reeling and their confidence may require some rebuilding,' said a dealer affiliated to a foreign brokerage.

Even local institutions like LIC, Unit Trust and mutual funds, who often hold up the indices in a downtrend, have stayed away from big purchases. Instead, they are believed to be churning their sheaf of stocks, replacing costly ones with cheap, but promising, picks.

Metal stocks continued to take the pounding; the BSE metal index lost 189.18 points at 5759.29. The volume of business fell to Rs 2672.85 crore from Rs 3184.92 crore.

The jitters were also felt in the forex market, where the rupee slipped to 43.95 after opening at 43.72.

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