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Stocks slip after the big leap

Mumbai, May 26: The Sensex, which surpassed the 25000-mark today, failed to hold on to the coveted level as profit-booking reared its head again, preventing investors from celebrating the swearing-in of Narendra Modi as India’s 15th Prime Minister.

Though the benchmark index surged nearly 482 points during intra-day trading to touch a peak of 25175.22, the momentum fizzled out in the last hour. The Sensex finally ended with a modest gain of only 24 points.

According to market experts, stock prices, which had seen a huge run-up in recent times, have now given way to caution among investors. Indices are likely to remain rangebound over the next few days. However, a few experts believe a correction is likely with the key event now over.

“Looking at the new government, the markets will not be either euphoric or worried. Narendra Modi’s team is relatively small and younger too. With an important event over, the focus of attention will now be the steps taken by the new government, the monetary policy and the Union budget,” a senior official of a foreign brokerage said.

The official added that stock prices might see a correction in the immediate term as they have run-up too fast.

In intra-day trading today, the 30-share BSE Sensex opened marginally lower at 24913.89 and breached the 25K mark within five minutes of commencement of trade. The index remained above this key psychological level at various points and hit the day’s high of 25175.22 boosted by power, PSU, capital goods, auto and realty stocks.

However, the momentum fizzled in the end with the index briefly slipping into the negative zone to touch a low of 24433.90. It recovered marginally to end 23.53 points, or 0.10 per cent, higher at 24716.88, surpassing its record close of 24693.35 on Friday. The index showed a movement of 741 points during intra-day trade.

On May 16 — the counting day — the Sensex had hit a lifetime high of 25375.63. However, investors were deprived of celebrations as stocks did not close above the 25000 mark.

The 50-share Nifty, which had touched a high of 7504, succumbed to profit-booking and eased 8.05 points, or 0.11 per cent, to end at 7359.05.

Meanwhile, the rupee today weakened by 19 paise, its sharpest drop in over a month, to close at 58.71 against the dollar.

 
 
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