MUMBAI, March 3: The bull rally came to an abrupt halt on the stock markets as wary market players unloaded shares fearing yet another round of political uncertainty. The Sensex which soared by 150 points on Monday plummeted by 126.61 points on sustained selling pressure on the Bombay Stock Exchange on Tuesday.The Nifty index of the National Stock Exchange fell by 34.70 points to close at 1,063.50. The 30 share sensitive index (Sensex) of the BSE plunged below the crucial 3,700 benchmark to close at 3,646.00. Uncertainty in the market led to erratic price movements among leading pivotals. Sensex which opened on a stagnant note at 3,772.24 nosedived by 172 points at one instance to touch an intra-day low of 3,600.06. It later recovered marginally.
"There is a nasty fear of history repeating itself. Stability seems to be a distant dream," said a BSE broker. "It seems nobody is getting absolute majority. This means there will be a coalition government. From the previous experience, the stability ofcoalition governments leaves much to be desired. With different parties pulling in different directions, many reforms may get stuck," said an NSE dealer.
Even though nervousness replaced euphoria in the markets, the BSE registered a record turnover of Rs 1,598.58 crore while the NSE saw a huge turnover of Rs 2,319.65 crore. Domestic institutions were in the forefront booking profits in several counters. FIIs also sold several stocks adding to the bearishness.
ITC which remained in the limelight attracted record volumes on the BSE and the NSE. According to market sources, a big sell order at the ITC counter on the NSE not only bridged the Rs 5 gap which existed between the two local bourses, but also brought down the stock from a high of Rs 720 to close at Rs 692.25. However, the stock closed at Rs 706.90 setting a record volume of Rs 1,259 crore on the NSE.
The ITC counter which showed significant movements in last two sessions, attracted a record volume of Rs 2023.36 crore on Tuesday on both theexchanges. This means nearly 50.5 per cent of total volume of Rs 3908.23 crore came from the ITC counter alone.
The slow but steady entry of bears also saw 151 stocks hitting the lower end of their price bands (circuit filter) on the NSE. "The market will show two-way movements till a clear picture emerges at the Centre. Bulls who made optimistic buying at several blue chip counters on hopes that the BJP would get absolute majority changed with the political trend and booked profits," said an operator, adding, "The market was already in an overbought position with the Sensex going up by nearly 350 points in the last one week.
"UTI reportedly pressed huge sales in ITC, Reckitt & Colmann, BHEL, Bajaj Auto, P&G, MTNL, Castrol and HLL. Sources said leading FIs were rumoured to have sold chunks of ICICI, L&T and SBI at the demat segment, and interestingly at a discount of over 2 per cent to its market price in the physical segment.
Global depository receipts (GDRs) of Indian companies also came underpressure in overseas markets. The BSES GDR fell by 7.06 per cent to trade at $ 19.75, as per the mid-day prices collated by Skindia Finance. The GDR of Indian Aluminium fell sharply by over 15 per cent to trade at $ 2.75. Reliance was traded at $ 8.15, registering a net loss of 9.44 per cent.
According to Samir Arora, chief investment officer, Allianz Capital, though "there is no clarity on the political front, what we need from the party which comes to power, is a quick budget, which could push in for large projects in the infrastructure sector". The same feeling was echoed by many others also.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
