Markets fall by 120 pts, Zee loses 12 pc

Markets fall by 120 pts, Zee loses 12 pc
ENS ECOMONIC BUREAU

MUMBAI, MAY 10: Continuing their erratic and volatile movement, stock markets plunged on Wednesday as foreign investors and local operators continued their selling spree. The benchmark Bombay Stock Exchange Sensex fell by 2.62 per cent, or 120.09 points, at 4,458.40. The National Stock Exchange Nifty index ended 1.20 per cent, or 16.55 points, lower at 1,362.

Share values once again turned weak on selling pressure amid disappointment over the results of media and television major Zee Telefilms. Zee shares ended at the lower end of the 12 per cent circuit limit at Rs 620.80 with a net loss of Rs 84.60 as its operational earnings fell below market expectations. Most software and pharma shares were down.

Brokers said that the market's direction was getting increasingly unpredictable and volatility was keeping investors away. ``The market is jumping one day and crashing next day. There is no logic and rational in the market movement,'' said an NSE dealer. Sensex had shot up by 115 points on Tuesday.

Adding to the market worries, the rupee slipped to a record low of 44.07 per dollar. The weaker rupee which usually sends stocks of firms like software and pharmaceuticals with big export earnings up, did not have any impact. On the contrary, it created panic about FII selling in Indian stocks. Infotech leaders like Infosys, Satyam and Wipro closed lower.

Figures from the Securities and Exchange Board of India (SEBI) on Tuesday showed foreign funds were net sellers of $ 101.8 million on Monday -- quite contrary to their buying spree even when the markets were tumbling from all time highs in February.

Operators said persistent fall in the technology-high Nasdaq Stock Exchange for the last two straight sessions and reports of weakening Asian stock markets mainly triggered a fresh selling wave, particularly in information technology (IT) and telecom sector stocks. They said FIIs which remained major buyers in several infotech stocks on Tuesday's trading made sizeable selling largely on fears of a hike in interest rate by the US Federal Reserve.

The behaviour of the FIIs is also becoming unpredictable. ``Going by the behaviour of the FIIs, it seems even these foreign investors have shed their long-term-investment attitudes and has turned traders of late,'' said a dealer with a domestic broking house.

ASIAN MARKETS WEAK:Meanwhile, Asia's share markets headed south on Wednesday after wary investors cashed in and flocked to the sidelines, mirroring a session of liquidation on Wall Street. Regional markets, weak since Monday, slid after the Nasdaq composite index shed 2.3 percent to end at 3,585.01 on renewed concerns over technology sector valuations.

Tokyo's Nikkei 225 average came off early lows from a technology stock selloff to end down 0.8 per cent at 17,701.47. The earlier selloff was sparked by a report showing foreigners sold a net 846 billion yen of stocks, the largest monthly amount in 10 years. Hong Kong's Hang Seng Index sank 2.15 per cent to 14,458.99 in late afternoon after a broad-based sell-off triggered when the index fell through the 250-day moving average support at 14,600.