Mumbai, Feb 27: After opening firm, the stock markets lost the gains amidstrumours which took a major toll on the new economy stocks. Technology stocksin particular suffered sharp setback with some even touching two lowercircuit filter of eight per cent on Tuesday in the wake of panic sellingtriggered by speculation of defaults by operators.New economy stocks like HFCL, Global Telesystem, Silverline, Zee Telefilms,Satyam Computers, Aptech and Wipro bore the brunt of selling pressure asrumours gripped the market that a leading broker having high stake in someof these stocks would face payment crisis on the BSE and on the CalcuttaStock Exchange (CSE). Had it not been for a dramatic recovery in index heavyweights like ITC, Infosys and Tisco at the fag end, the damage would havebeen still heavier, said brokers.
The BSE Sensex opened with positive at 4140.63 points and rose to anintra-day high of 4156.03 points in the morning session. However, after themid-session, selling pressure brought it down to the intra-day low of4020.68 points before closing at 4069.68 points compared to Monday's closeof 4112.69 points, a net fall of 43.01 points.
S&P CNX Nifty also followed suit by losing 11.55 points to close at 1300.85points compared to the previous close of 1312.40 points.
Mr Jignesh Shah, chief dealer, Refco-Sify Securities said, market does nothave major expectations from the Union Budget. The Budget is expected todeal with macro-level changes and whatever harsh changes that are expectedat micro-level have already been discounted by the market.
Domestic financial institutions' attempt to lift the falling sentiment bymaking small purchases at the lower levels also failed. Market sources, whoexpect a growth-oriented Budget on Wednesday, did not rule out further fallin the market inspired by rumours of likely payment default by a leadingbroker.
The finance minister is expected to widen the tax base, cut the subsidy billand initiate other pro-reform measures and favourable to the market.
Marketmen are also hopeful about some favourable announcement for theautomobile and the fertilizer sectors. Stocks in these sectors may see agood rally in the following weeks and then the fundamentals will drive themarket, Mr Shah said.
Zee Telefilms led the fall in the new economy stocks on Wednesday. It lost14.22 per cent to close at Rs 164.95, which is its new 52-week low. SatyamComputers and NIIT also lost close to five per cent to close at Rs 307.65and Rs 1182.25 respectively on Tuesday in the index category. HFCL andGlobal Telesystems were the top losers in the "A" group with both the stocksfreezing at 16 per cent to close at Rs 578.35 and Rs 353.15 respectively.
SSI, Pentamedia, Aptech also bore the brunt of the tech meltdown and closedwith a loss of more than 12 per cent.
Copyright © 2001 Indian Express Newspapers (Bombay) Ltd.
