The Hindu Business Line : Profit-booking snaps rally; Sensex down 78

Analysts dubbed the steep fall in the BSE Sensex and the NSE Nifty indices as "expected correction", but were divided whether the indices would head north or south tomorrow. Large-scale unwinding of long positions in the futures market also appears to have helped the slide.

The BSE Sensex fell 1.6 per cent or 78.86 points to close the day at 4851.67 and the S&P CNX Nifty of NSE closed 1.7 per cent lower at 1542.70.

Overall trading volumes on both the exchanges were fairly low compared to those in the past week.

Profit-booking was seen in technology, steel, auto, pharma and banking stocks.

Dealers said stocks such as Tata Motors, Tata Steel, Reliance, Ranbaxy and SBI, the so-called momentum stocks, were ruling weak today on account of the selling.

According to a technical analyst with a domestic brokerage firm, the underlying sentiment is still bullish and the markets would bounce back, perhaps in the next session itself.

He believes the Sensex would cross the 5,000-mark in a couple of days.

Foreign institutional investors appeared to have kept away from the market today.

Domestic mutual funds sold heavily today. "Usually in a falling market as today's, we see FIIs buying towards the end of the day at lower levels. However, Monday afternoon appeared rather quiet," said a dealer.

FIIs have brought in more than a billion dollars in the first fortnight of October, perhaps an all-time record for the country. Last Friday, they poured in another $116 million, taking the total inflows this year past the $5-billion mark.

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