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Since 1st March, 1999
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Sensex leaps only to plunge
- Bellwether index fails to hold on to rally, closes below 9000

Mumbai, June 14: The decline and fall of stocks continued today when hectic selling short-circuited a 324-point rally of the sensex which finished below 9000 for the first time since December 8, 2005.

Market players are wary of rising interest rates in the US and are leveraging every rally to liquidate positions.

Brokers said the technology pack first flashed the sale lights with others taking cue.

“Over the past several days, we have seen that various sectors have faced selling pressure, be it metals, FMCG or banking. Today, it was the turn of technology stocks,” a broker said.

Heavy selling in the mid-session blasted the 30-share sensex off its intra-day perch of 9387.06, careening the index by 588 points to a low of 8799.01. The sensex had opened strong at 9156.97.

There was some relief towards the end as short-covering nudged the sensex up to 8929.44, a loss of 133.21 points.

The S&P CNX nifty of the National Stock Exchange (NSE) fell by 30.50 points, or 1.15 per cent, to 2632.80 from yesterday’s close of 2663.30.

Selling today was on account of high net worth individuals and domestic mutual funds who pressed the button after staying low in early trading to meet redemption pressure from corporate houses.

Mutual funds have been sellers throughout this month and their withdrawals are Rs 1,421 crore so far.

Amid low volumes of Rs 3,008.69 crore, Reliance Industries clocked the highest turnover of Rs 272.04 crore, followed by SBI (Rs 104.79 crore), Tata Steel (Rs 93.74 crore), ACC (Rs 93.16 crore) and Bharti Tele-Ventures (Rs 84.32 crore).

Among the sectoral indices, the BSE IT index suffered the deepest gash losing 150 points to end at 3043.53 as investors dumped shares of TCS and Infosys among others. Mid-cap and small-cap stocks, too, continued to stay morose under selling pressure.

Still there were some bright spots in today’s trading: ITC gained and so did the oil PSUs such as HPCL, BPCL and ONGC. Analysts said value has emerged in few stocks.

Brokers are hoping for a better tomorrow, pining their faith on the US markets which opened on a positive note today. Others are not so optimistic, citing FII figures which showed a net outflow of $18 million on Tuesday. Provisional numbers for today's trading also showed a net outflow of Rs 365 crore.

Global meltdown

According to Morgan Stanley Capital International (MSCI), the month-long selling on global bourses has caused losses of more than $2 trillion to investors.

The index compiled by MSCI Barra does not account for all global stocks, meaning the total amount of lost wealth is greater still.

Investors pulled out about $8.5 billion from emerging equities in the three weeks ended June 8, according to data from Funds research.

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