The Hindu Business Line : Sensex ends flat after 120 pt gain — High volatility marks day's trading; `correction overdue'

THE rally in stock prices over the last several sessions was snapped on Tuesday by profit booking that lead to high volatility and shaved-off the day's entire gain of almost 120 points from BSE's Sensex in the last one hour of trading. The Sensex, however, was down only by 5.48 points compared to the previous close.

Brokers said today was the most volatile day for the stock market this year. Sensex opened at 5,831.78 and touched the day's high of 5,920.79, low of 5,762.60 and closed at 5,791.85. However, there was no major fall from the previous closing as Sensex was down just 5.48 points. On NSE the S&P CNX Nifty was down marginally by 0.8 points to close at 1,873.25.

However, several mid-cap stocks saw sharp dip in their price, after gaining continuously in last month.

Brokers said the correction in the stock price was overdue, as Sensex has already gained around 800 points this month. They expect more selling to take place in the days to come. But most of them feel market to remain firm on Wednesday (the last day of the month and year) due to NAV propping by mutual funds and FIIs.

Heavy selling of Sensex and Nifty through basket trading mainly triggered the fall in the stock price. Selling was mainly from by foreign hedge funds and domestic institutions. This was followed by selling by day-traders that led to sharp fall in the last one hour of trading

Brokers said in the next few days, market is likely to be more volatile due to uncertainty over the short-term trend of the market. "Sensex has gained 800 points this month, some correction is expected," said a dealer with a domestic broking firm.

In today's trading, index heavyweight Reliance Industries kept the indices from further fall. RIL gained 4.52 per cent at Rs 560.95. Even Infosys Technologies gained 0.44 per cent at Rs 5,513.

However, the advance-decline ratio indicated more seller than buyers. Out of the total of 2,296 stocks traded on BSE 691 advanced, 1,545 declined and 60 remained unchanged.

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