The Telegraph
Since 1st March, 1999
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Oil ache for bruised markets

Mumbai, May 31: The new government’s economic policy continued to plague the bourses and the security concerns about Saudi Arabia — the largest oil producer in the world — rattled the markets.

After an initial sharp setback, the sensex today ended 76 points in the red as speculators covered their short positions later in the day.

Early trades saw the BSE 30-share index, the main barometer tracking market mood, slump by 170 points to an intra-day low of 4665.21, but ended at 4759.62 compared with Friday’s close of 4835.39 points, a net fall of 75.77 points or 1.57 per cent.

Summing up the day’s trading on the bourses, Venkatesh Iyer, director of R. K. Chari Stock Broking, said, “There’s a general lack of interest and confidence among investors.”

The al Qaida attack in Saudi Arabia compounded market woes.

“The mood is similar across Asian markets. Our markets are not insulated from other emerging markets,” Iyer added.

The PSU and banking sector scrips suffered heavy losses with the two sector-specific indices slipping into the red. The BSE-PSU index dipped by 123.29 points or 4.07 per cent to 2903.66 from 3026.95 and the banking index was down by 136 points or 5.40 per cent to 2382.42 from 2518.42 points.

Initially, investors pressed sales on fears of reversal of economic reforms as well as withdrawal by foreign funds. Foreign institutional investors (FIIs) have withdrawn $785 million from the Indian capital markets in May. According to broking analysts, it is the first month of net sales by foreign institutional investors.

The rupee fell to 45.55/57 from Friday’s close of 45.4750/4850 on fears that FII fund outflow may accelerate in the coming days.

Key public sector stocks like Bharat Heavy Electricals Ltd, Hindustan Petroleum, Bharat Petroleum, State Bank of India, Oil and Natural Gas Corporation and Indian Oil Corporation suffered losses, pulling down the main indices. It was left to the technology stocks to stage a rally, buoyed mainly by the fact that rupee was weakening against the dollar, which would directly add to their bottomline.

Infosys, Satyam and Wipro were among the major gainers today.

The BSE-100 index fell by 43.05 points to 2525.35 from its previous close of 2568.40.

Even as values plunged, the volumes on BSE also moved southwards and was pegged at Rs 2,033.16 crore, down from Rs 2,324.15 crore on Friday.

Reliance clocked the maximum turnover at Rs 240.90 crore followed by State Bank at Rs 158.44 crore.

In the specified group, 168, including 24 index-based shares, suffered sharp to moderate losses, while 29 others finished with gains.

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