The Hindu Business Line : FII selling pulls down Sensex by 172 points

Domestic mutual funds, said to be facing some redemption pressure ahead of a string of primary issues, were also selling from their portfolios, according to market talk.

The BSE benchmark, the Sensex, lost 2.85 per cent of its value or about 172 points by the end of trading on Thursday to close at 5,855.10, well below a critical support level of 5,866. Only two stocks - HDFC and Bharti Tele - among the 30 index shares withstood today's onslaught. In the `A' group, more than 10 stocks fell for every one that advanced.

The S&P CNX Nifty, the 50-share market indicator of the NSE, also tumbled 3.35 per cent from its previous close of 1,916.45 to end Thursday's trade at 1,852.25. A chartist said since the index had breached a crucial support level of 1,861, the weakness might continue till 1,825, the next prop. Incidentally, a large proprietary trader was reported to have heavily sold Nifty futures.

"Pressure began to build from the morning trade itself when several investors started offloading frontline stocks. Many investors are liquidating their positions for cash to participate in the forthcoming primary offers," said a dealer with a local broking firm.

He said heavyweights such as Infosys, HCL Tech, Satyam, Wipro, Hindustan Lever, Gujarat Ambuja and GAIL came under selling pressure in early trade itself. Portfolio investors dumped technology stocks after the US proposed new legislation banning use of federal funds to buy services produced by outsourcing, a dealer said.

The Reliance Industries' counter came under pressure towards mid-day and selling became even more broad-based as the day progressed. Investors sold shares of public sector companies too in large quantities bringing down the BSE PSU index 3.13 per cent or 123 points to 3,809.

An institutional dealer said market men were talking of three large foreign funds as the big sellers today. SEBI data released on Thursday showed that FIIs were net buyers of equities worth Rs 377 crore on Wednesday. However, domestic mutual funds were sellers to the tune of Rs 83 crore on Wednesday. They have cumulatively sold about Rs 280 crore this week.

Meanwhile, there were reports of income-tax authorities conducting surveys on certain companies linked with a large corporate house. The department had done surveys of certain companies based in Kolkata over the past couple of days, a source said. The corporate group itself was said to be a large seller in many stocks, especially Nifty scrips.

A fund manager with a leading mutual fund said the profit booking may continue to about 5,700 level of the Sensex. "We may see buying from those levels," he said.

More Stories on : Foreign Institutional Investors | Stock Markets

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
Indo-Pak peace process on right track: Kasuri

International air travel to cost more

Is it time for more low-cost airlines?

Q3 growth estimated at 8.9 pc: Jaswant

Cabinet meet to clear major proposals

Scratch your card for home loan at 4.99 pc

MFs turn net sellers ahead of big IPOs

FII selling pulls down Sensex by 172 points

Want more money? `Top up' your home loan