MUMBAI, February 4: The market reacted strongly to an impending US-Iraq showdown in the Gulf. The Sensex fell 80 points before recovering to close at 3319.19 points, down 35.69 points over Tuesday's close.The Nifty index also declined by 7.30 points to close at 967.95 points, with the exchange recording a turnover of Rs 1,518.43 crore.
The Russian prime minister's reported statement the world could be plunged into a third world war further shook the capital markets.
Aggressive selling by the foreign institutional investors (FIIs) at the counters of BPCL, EIH, VSNL, Bharat Forge and Asian Hotels saw the sentiments getting weaker.
The turnover on the Bombay Stock Exchange (BSE) rose by over 30 per cent to close at Rs 1,007.71 crore. The cash-group stocks' contribution dipped over Tuesday to Rs 34 crore.
"The market is in a hollow state," said a fund manager with a leading domestic institution. "The market is still not discounting the political factors, it should continue to sag downwards for a coupleof sessions," he added.
Although figures released by the Securities & Exchange Board of India (SEBI) show FIIs have been net-sellers, industry sources say select FIIs continue to be bullish on domestic stocks. They have placed huge buy orders at the counters of MTNL, HPCL, Castrol, Telco and Bajaj Auto, the sources add.
"Several fund-managers have taken the opportunity to pick fundamentally sound stocks," said a dealer at an FII brokerage firm. The multinationals continued to be the fancied stocks on the local bourses. Hindustan Lever touched an intra-day high of Rs 1,415, but closed at Rs 1,395.50, up 1.79 per cent. Glaxo however, lost steam to dip by 4.27 per cent and close at Rs 369.20.
Rumours that Morgan Securities, Credit Lyonnais and Openheimer were active traders at the market, saw the local bulls building up fresh positions on the first day of the National Stock Exchange (NSE). Huge negotiated and bulk deals were recorded at the counters of LML, Cipla, HPCL, Corporation Bank, IPCL andVSNL.
Domestic financial institutions were rumoured to have registered buy-orders at the counter of the State Bank of India.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
