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Thursday thunderbolt strikes

Mumbai, July 7: Blow-ups in London, blisters on Dalal Street. A wobbly market wilted in the heat of the UK explosions as investors trampled on shareholder wealth worth Rs 31,000 crore in a stampede out of stocks.

The sensex plunged 142 points to 7145.13 and the Nifty 48 points to 2179.40 as the chaos in London played out on TV screens. “The reaction was knee-jerk at the fag end of the trading session. As it is, we were due for a small correction. We expect the US to provide cues on where markets will go,” said stock broker Venkatesh Iyer.

Such was the force of the slide that every two shares slipped for every one that gained. Reliance Industries set the tone for the late-noon free-fall, its share quivering on the buzz that the petrochemicals company will be asked to share the oil subsidy burden. “It cast a pall of gloom on the stock, which has been propelling the sensex to new highs since the settlement between the Ambani brothers,” a dealer affiliated to a prominent brokerage said.

The stock was the biggest loser, shedding 4.8 per cent to Rs 613.85. It has a weightage of 11 per cent on the sensex. “The markets opened weak as reports of Reliance being asked to share the subsidy burden along with other oil companies did the rounds,” said Dhiraj Sachdev of ASK Raymond James, a premier portfolio manager.

The 142-point slide is the sharpest single-session loss since April 15, when the sensex had plunged 219.58 points. Part of the weakness today had nothing to with the London mayhem ' which only hastened the pace of the fall.

Market mavens say a correction was overdue, given that the prices of many shares were already “over-stretched”. The multiple explosions rocking London forced the sensex to fall in line with the global downtrend.

Foreign institutional investors (FIIs), consistent net buyers in the past couple of weeks, are believed to have resorted to a selloff in the last hour of trading. The meltdown happened around the time world oil prices flared up above $61 a barrel in New York and $60 in London.

The volume of business on BSE surged to Rs 3766.52 crore from Rs 3023.73 crore on Wednesday. Reliance Capital’s was the most briskly traded share with a turnover of Rs 443.26 crore. It was followed by RIL (Rs 227.48 crore) and Provogue, which clocked Rs 145.93 crore in debut.

In the specified group, 156 shares, including 26 from the sensex, suffered losses; only 36 finished in positive territory.

In the large pack of losers, ONGC slipped Rs 45.45 to Rs 929.35, SBI Rs 10.40 to Rs 710.30, Infosys Rs 29.45 to Rs 2317.85, TCS Rs 9.95 to Rs 1309.55 and Wipro Rs 24.95 to Rs 710.30.

Gold dearer

Gold, the favoured investment in uncertain times, jumped $5.14 to $428.90 an ounce in London. This was its biggest one-day gain since June 16, but is understood to have retraced part of the gains in the US market.

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