Another cause of concern is ballooning volumes seen especially in a falling market during the week, reflecting weak undertone, brokers say. Operators were seen taking position in more defensive sectors like FMCG, pharma and refinery stocks. According to brokers, the fall has been aided by poor sentiments due to the arrest of diamond merchant Bharat Shah, downgrading of Infosys and, more recently, MRTPC notice against country's major cement players, along with limited options available in other old economy stocks.

Since start of the new year, while the ratio of number of scrips advancing to those declining on BSE saw a consistent fall from 1.57 on January 1 to 0.51 on January 11. Turnover rose from Rs 3962 crore on January 1 to Rs 6345 crore on January 9. Though the downtrend was more steady in the B group, it was steeper in group A. While in the B group, the advance to decline ratio, fell from 1.44 to 0.54, the A group scrips saw it drop from 3.09 to 0.28 over the first nine trading days of this year. Rising turnovers have added fuel to the fire, with prices taking a plunge. Volumes of trade on BSE rose steadily till January 9 but have come down since then with markets crashing on arrest of diamond merchant Bharat Shah.

Despite the slump, FIIs were undeterred and pumped in a hefty Rs 1256 crore into the markets during the current year. The figure crosses Rs 1500 crore if we include inflows on the last day of 2000. While FIIs injected Rs 93.5 crore in the equity markets on Wednesday, they pumped in Rs 101.2 crore in debt. The total FII investment in debt and equity touched US$ 390.3 million over this period. However, the domestic players including mutual funds have been large sellers during the period. The funds also seem to have turned defensive and seen shifting to more reliable debt markets. They are trying to offload in IT, specially Infosys, which was downgraded by UBS Warberg recently.