Mumbai, Mar 12: Ripples from Sebi's indictment of Hindustan Lever cascaded on the scrip, which lost Rs 14 on Friday over its previous close. The fall in the scrip, which has a 14 per cent weightage in the Sensex, pulled the 30-share BSE Sensitive Index below the crucial 3,700-mark.Uncertainty on the political front further pulled down scrips on the Bombay Stock Exchange today. Brokers said that AIADMK's stance unnerved market participants, as it was hindering the formation of a BJP-led government. As a result, the Index failed to find support at the technical barrier of 3,742 to close at 3,716.50, down 35.59 points.
There was a lack of clarity on HLL's stand on the insider-trading charges levelled against it. Also, the actual implication of the prosecution of the top directors of the company was not clear. This saw local operators offloading their positions. "There is definitely a lot of concern about the Sebi verdict. If it goes against the multinational it would erode investor confidence," said a broker. However, a section of the market continues to believe that HLL is innocent.
Rumoured purchases by FIIs like Credit Lyonnais and Oppenheimer in the shares of HLL and Pond's helped the stocks touch intra-day highs of Rs 1,602 and Rs 1,140 respectively. However, HLL closed at Rs 1,578, registering a net loss of Rs 14 over its previous close. The Pond's counter lost Rs 40 over its previous close of Rs 1,145.25.
According to market sources, buy orders at the Rs 1,525 level were placed much before the official closing. The HLL stock has about 14 per cent weightage in the Sensex. The selling spree in the counter spread to related stocks like Pond's and Lakme.
The recovery towards the last phase was attributed to the shortcovering on the last day of the trading cycle on the BSE. The exchange is closed for Holi on Friday. The bears failed to tighten their hold on the ITC counter, which touched a new 52-week high of Rs 744 on the BSE. Increasing discrepancies in the closing price of ITC on the BSE, NSE and Calcutta stock exchanges left the market in a confused state. This led to expectations of a higher backwardation of Rs 15-17 in the coming badla session.
On the NSE, the stock closed at Rs 732 levels, down by Rs 10 against BSE's close of Rs 744. The stock lost Rs 15 on the CSE.
"Fund managers seem to have adopted a wait and watch attitude. The absence of panic-selling is the saving grace for the market," said a dealer at a foreign brokerage.
Rumours of institutional buying at the swadeshi counters of Wipro, Punjab Tractors, Tata Infotech, BHEL, Swaraj Engines, Bajaj Auto, ACC, ITC Hotel, ICICI Banking and Reliance helped revive market sentiment.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
