The Telegraph
Since 1st March, 1999
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Stocks swoon on profit rush

Mumbai, Jan. 6: Stocks went into a tailspin today as profit-hunters swooped in and investors in software shares retreated due to jitters over third-quarter numbers.

On Dalal Street, the BSE sensex slid below 6000 points, settling at 5943.64 in a 95.36-point loss over Monday. The BSE-100 shed 63.97 points at 3187.46 from 3251.43.

“This correction can continue for a day or two,” said Arun Kejriwal of Kejriwal Research and Investment Services. The index gyrated in a range of 204 points.

Many thought like Kejriwal. The nerves are taut ahead of the third-quarter earnings announcements that will be kicked off with Infosys’ numbers on Friday. The results will show whether the tech sector, which makes or mars a market rally, has finally left its travails behind.

Reliance Industries and Lever, both market-movers by virtue of their sheer weight in key indices, also kept operators on tenterhooks, even though there is a feeling that they will dish out glowing scorecards this month.

Both bulls and foreign institutional investors (FIIs) hold abnormally large positions, but the latter were not selling.

“The correction is a blessing in disguise too, because the absurd difference between rates in the spot markets and futures have disappeared,” Kejriwal said.

The cost of carrying in the futures segment was almost 30 per cent on an annualised basis. After today, traders feel that the figure will fall to a reasonable 24 per cent.

Infosys, Satyam, Tata Steel, ACC, Grasim, ONGC, Reliance, &T were among those that ended up bruised. Bucking the trend were Bharti, BHEL, BPCL and RCF. As a matter of fact, they racked up sharp gains.

In BSE’s specified list, 167 shares, including 24 from the index, registered sharp to moderate falls, while 30 closed with gains.

The volume of business improved further to Rs 3393.06 crore from Rs 3249.91 crore on Monday.

Gold peaks anew

Gold prices hit a record high of Rs 6,360 per ten grams within hours of it scaling a 15-year peak in overseas markets.

The yellow metal was quoted the highest in Mumbai, where it shot up to a stagerring Rs 6,360. The going rate was Rs 6,350 in Delhi.

Buying activity gathered momentum following a sharp rise in prices abroad, where prices spiralled to $430 an ounce. These levels were last seen in August 1988.

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