The Telegraph
Since 1st March, 1999
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Tuesday tide sinks shares
- Sensex plumbs 2-month trough

Mumbai, March 29: Stocks were down to their lowest point in two months and investors poorer by a staggering Rs 38,091 crore as a selling tsunami triggered by a year-end scramble to square up deals lashed the market today.

The sensex sank to 6367.86 in a 143-point loss over its previous close, felled also by the desperation to unwind derivatives contracts that have to be closed by March 31.

Year-end compulsions forced many brokerages to scale down investor commitments and operators resorted to across-the-board sales to clear outstanding positions.

Stock indices abroad mirrored the convulsions at home. Monday's quake in Indonesia set off tremors in Hong Kong, where the hang seng index crashed 185.22 points and in Tokyo, where the nikkei slumped by 192.48.

Some, however, saw an opportunity in calamity. 'This is a great opportunity to buy quality stocks,' said Girish Bajaj, a strategist managing portfolios for big investors.

Investors like Bajaj saw a silver lining in the modest recovery that occurred in the dying minutes of today's session. He has pinned hopes on the cash mutual funds mopped up in recent public offers that rode the success of the market. 'They are waiting to invest nearly Rs 5,000 crore in stocks,' Bajaj said, referring the success of the Kotak, Franklin Templeton and Reliance Mutual flotations.

The gut-wrenching ride began with the sensex opening strong at 6512.98 but plumbing the day's low of 6326.73. It later clawed back a little to a close of 6367.86 against Tuesday's finish of 6510.74 in a slide of 2.19 per cent.

Worrywarts in the market fretted about the waning interest of FIIs, who were believed to be big sellers today. They dumped shares worth Rs 131.20 crore on March 23 and made purchases of Rs 263.20 crore the next day. However, the figure for March 24 has been puffed up by their Rs 550-crore infusion in the PNB offer.

Some analysts are worried stocks have tumbled below key support levels, fuelling fears that the worst is not over.

Public sector companies, banks, oil and metal stocks bore the brunt of the selling avalanche. Even Reliance, whose share hardened in recent weeks amid talk of a settlement between the Ambanis, could not emerge unscathed.

Among others, State Bank, Tata Steel, ONGC, Dr Reddy's, ITC, Tata Motors, ICICI Bank, HDFC and Bhel took it on their chin. The crash was mirrored in other indices too ' the BSE-100 gave up 74.65 points to end at 3410.09.

The losses coincided with heavy volumes, which jumped to Rs 2171.89 crore on the BSE from Rs 1839.35 crore on Monday. Tata Steel was the turnover topper with a tally of Rs 139.76 crore and Reliance with Rs 123.81 crore.

In the specified group, 165 shares, including 28 from the sensex, suffered sharp to moderate losses. Among the big losers, Reliance lost Rs 18.10 at Rs 548.95, State Bank Rs 25.10 at Rs 640.90 and Tata Steel Rs 16.95 at Rs 401.40. Bajaj Auto, with a gain of Rs 1.70 at Rs 1019.90 and HDFC Bank with a rise of Rs 1.90 at Rs 536.60, stood out in the ruins.

Rupee weaker

The rupee tumbled to a five-week closing low of 43. 82 against the greenback, pulled down by month-end dollar demand amid receding supplies from foreign funds. The currency has lost four paise over its last finish.

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