Mumbai, March 12: War nerves and rumours of payment problems combined to set off a selling wave that swept away Dalal Street to a three-and-a-half-month low.
Operators rushed to sell off holdings, sending the Bombay Stock Exchange (BSE) sensex tumbling 44.83 points to 3110.08 in a slide that took most key shares down the slope; the broad-based BSE-100 index was also off 19.16 points at 1536.69 from its previous close of 1555.85.
Rumours of operators squaring off open positions worth Rs 70 crore stoked rumours that a few of them had been trapped by bears trying to tighten their grip again.
Also, reports that exchanges will be closed on Friday due to Moharram prompted operators to prune commitments ahead of a long week-end, which will be followed by a Holi closure on March 18. “Investors are unwilling to take exposures as caution is the byword with fears of a war breaking out in the Gulf overwhelming all else,” a key BSE broker said.
Technology stocks that had helped bring about a long-awaited rebound on Tuesday were dumped this afternoon. Titans Infosys and Satyam Computers found themselves at the receiving end of investor angst.
Petrochemical major and sensex-mover Reliance suffered sharp reverses, as did Hindustan Lever, Hindustan Petroleum, Telco, Hero Honda, HDFC, ITC, Ranbaxy, State Bank of India, Zee Telefilms and Glaxo.
Oil prices weakened on Wednesday as Britain and the United States suggested Iraq could be given a few extra days to prove it had disarmed and after Opec said it would prevent a shortage in the event of a war, adds Reuters.
Price falls were limited, however, as the International Energy Agency, voiced doubts that Opec’s spare capacity would be enough to compensate for any shutdown of Iraqi supplies. US April light crude futures shed 22 cents to $ 36.50 a barrel after falling by 55 cents on Tuesday. In London, benchmark Brent futures fell 15 cents to $ 33.14 a barrel.
“The market’s taking comfort from Opec comments that there will be some additional supplies if Iraq's production is halted due to war,” said John Hirjee, senior energy analyst at Deutsche Bank.