The Telegraph
Since 1st March, 1999
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Profit hunters smother stocks

Mumbai, Dec. 5: Profit-booking sparked by whispers about fresh margins on some shares sent stocks into a tailspin, pummelling the BSE sensex 94 points.

The seven-day winning streak snapped as the big guns of the market came under fire from operators looking to make the best they could before prices fall further.

The election results were discounted, as was the strong FII support that has kept the rally going. It was the entry of weaker players keen on a fast buck that lead to the erosion in values many have warned of earlier.

The 30-share barometer of market sentiment gave up 1.8 per cent of its value, though the decline was not a jolt to those who focus on fundamentals.

What took most by surprise was the sheer swiftness of the slide — the steepest in the dying hours of trade.

The index opened on a strong note at 5245.75 and hit an intra-day high at 5263.11 before plumbing a trough of 5125.07 in the last hour. It closed at 5131.72 against 5225.90 on Thursday, a fall of 94.18 points or 1.80 per cent.

Some brokers attribute the decline to the additional margins the National Stock Exchange (NSE) reportedly clamped on some players in derivatives segment. There was, however, no confirmation on this score.

Fears of a tail-off in FII cash also weighed down sentiment. On Wednesday, the figure was Rs 154.70 crore, down from Tuesday’s Rs 286.70 crore and Monday’s Rs 563.40 crore. The infusion so far in this calendar is pegged at a record Rs 30,454.50 crore.

Blue-chips like Bhel, BSES, Ambuja, Grasim, HDFC Bank, Reliance, Tisco, Tata Motor, SBI, Satyam Computers, ONGC, Infosys Tech, HPCL, ICICI Bank, Tata Power and Zee Telefilms were the big losers this afternoon, largely due to selling by retail investors and local funds. Bucking the trend were HLL, Bharti Tele, HDFC, ITC and L&T.

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