Mumbai, Nov. 18: Fears that foreign institutional investors (FIIs) will scale back their market-boosting investments as the year draws to a close sent a chill down Dalal Street, dragging the sensex 49.10 points down at 4891.13.
Foreign funds, which have given the markets one of the best booms in over three years, are now worrying operators with signs that the $ 5 billion already pumped into in shares this year will not hold for long. The torrent of funds has propelled the index more than 45 per cent this year.
For instance, figures made available by the Securities and Exchange Board of India (SEBI) on Friday show their net investments at only $2.7 million against $70 million in October. This has sparked concerns they may soon turn sellers.
The pullback was sighted as the 30-share sensex initially rallied but failed to keep up momentum when the expected dose of FII flows proved elusive. Around noon, operators were seen offloading shares, pushing down indices into negative territory.
The BSE benchmark 30-share index opened moderately higher at 4955.32 over its previous finish of 4940.23 and rallied smartly to the day’s high of 4981.48. However, it met with a strong resistance thereafter and ended at 4891.13, a net loss of 49.10 points, or 0.99 per cent.
The apprehension of a slower FII participation hit old-economy stocks — steel, cement and banks — harder with firms like Grasim Industries, Tisco, Tata Motors, SBI, RIL, ONGC and many others suffering a setback.
The volume of business on Dalal Street, however, was higher at Rs 2136.83 crore compared with Rs 1851.58 crore on Monday. Satyam Computers was the top traded share with a turnover of Rs 180.11 crore. It was followed by Tata Motors at Rs 142.13 crore, Tisco at Rs 133.80 crore), RIL at Rs 96.01 crore and Infosys at Rs 92.68 crore.
The rupee plumbed a five-week low at 45.64 amid dollar-supply jitters and bouts of short-covering by banks and oil firms, dealers in the inter-bank forex market said. It opened steady at 45.56 but dipped to its intra-day low of 45.66. Having lost 0.8 per cent over the past week, it is now hovering around its October 15 level of 45.70.