Sensex slides 68 points as funds stay away
Our Market Bureau
Mumbai, Jan 9: A near-total absence of buying by institutions, both foreign and domestic, saw the 30-share BSE Sensitive Index plunge by another 67.96 points on Friday to close at 3,530.20.Largescale squaring-up of positions by speculators on the last day of the current settlement on the BSE added to the fall in stock prices, which saw the Sensex shed 155 points in two sessions. The BSE reported a turnover of Rs 1,119.81 crore. The Nifty index slumped by another 24.20 points to close at 1,033.55 with 701.48 lakh shares valued at Rs 1,869.11 crore changing hands. Friday's session was marked by a spurt in volumes recorded at the local bourses. Market participants attribute the rise in volumes to the increasing level of liquidation undertaken by local and foreign speculators. ``FII selling, though stock-specific, has been across the board,'' commented a dealer at an institutional brokerage house. ``The huge chunks of supplies could not be absorbed by the domestic funds which entered during the last
phase of the session,'' he added. Stocks like Tata Tea reported hectic trading with 1.2 crore shares changing hands on the local bourses. ITC recorded a volume of 1.27 crore shares on the NSE and 70 lakh shares on the BSE. Reflecting the overall trend in the market, 103 stocks hit their lower-end price bands on the NSE. Moody's critical evaluation of the Indian economy, irrespective of the various reforms undertaken, further ruined the perception of the fund managers, who have turned cautious after the southeast Asian currency crisis. According to SS Bhandare, economic adviser to Tata Services, the Indian climate is so vitiated by the events taking place externally that any such downgrading is likely to have a negative impact. ``Moody's downgrading exercise is unnecessarily compounding the problems which is unwarranted now,'' he commented. Net FII outflow during the first eight days of January stands at $4.7 million which, according to brokers, was another factor which affected market sentiment. In
December 1997, the net FII outflow was $155.4 million. According to market sources, a leading FII has been criticised for its involvement in various deals in the Indonesian markets. Rumours that fund managers are wary of dealing through this brokerage outfit unnerved local punters. At today's session, FIIs have been rumoured to have sold shares of Telco, Castrol, Ranbaxy, Hindalco and SBI. Among the BSE-30 index stocks, ITC recorded a gain of Rs 2 to close at Rs 595, Nestle moved up strongly by Rs 4.50 to close at Rs 281 and HLL closed at Rs 1,390 to register gain of Rs 6.75. However, most pivotals lost ground due to massive selling pressure. ACC registered a loss of Rs 50 to close at Rs 1,280, Reliance lost Rs 3.50 to close at Rs 163, BSES was down by Rs 5.75 to close at Rs 162.50, MTNL closed lower at Rs 235, IPCL recorded a loss of Rs 5, HDFC lost by Rs 140 to close at Rs 2,900. Hindalco touched a new low of Rs 676. FII selling at the counters of Thermax and Wartsila Diesel took a toll on their
respective stock prices. Thermax attracted a circuit filter at Rs 180.45, registering a net outstanding sale order of 1,500 shares. Wartsila Diesel attracted a lower-end circuit at Rs 142.55 before closing at Rs 141. ``The valuation theory put forth by some fund managers has proved to be a myth,'' commented a research analyst at an FII brokerage outfit. Among new listings, Gujarat Mineral Development Corporation's stock slumped to record a loss of over 6 per cent at Rs 131. Pivotals take a knock in kerb deals Pivotals took a severe beating in kerb deals on aggressive offloading by operators. Reliance was trading at Rs 160, down 2 per cent from its official close. Similarly, SBI was quoting at Rs 230 (Rs 234.75), ITC at Rs 585 (Rs 595) and Tata Tea at Rs 401 (Rs 408). Asian crisis spreads to world marketsFor the fourth time in recent months the Asian crisis threatened to engulf world markets. In early trade markets across Europe fell sharply. In a repeat of the domino effect, the crisisled to a meltdown in the US markets on Thursday, which in turn saw European bourses opening sharply lower. In Asia, the crisis extended to the fourth day on Friday, with the Singapore stock market slumping by 7.4 per cent, Hong Kong 3.9 per cent, Malaysia 3 per cent, Indonesia 1.2 per cent, Thailand 2.9 per cent, Shanghai B 3.8 per cent, Phillipine index 8.3 per cent and South Korea 2.9 per cent.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
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