Financial Daily from THE HINDU group of publications
Tuesday, Mar 16, 2004
Financial Daily from THE HINDU group of publications Tuesday, Mar 16, 2004 |
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Stock Markets Markets - Stock Markets Sensex drops 180 on bear attack Our Bureau
Mumbai , March 15 STOCK prices dropped like nine pins on Monday, pulling down major indices by over 3 per cent to new lows of this year. Even the Government's mobilisation of more than the disinvestment target in current fiscal failed to enthuse the market players. The major factor for the fall in stock prices was selling by all kinds of investors, especially the domestic funds, in order to pay their income tax liability. These investors have to pay capital gains tax on the profits made by them in the equity market this fiscal. In addition, there were talks of several mutual funds selling in the wake of heavy redemptions from their unit holders. "Several unit holders are going for dividend stripping and this has led to heavy redemption pressure on several mutual funds," said a dealer with a domestic broking firm. Huge inflow of paper of PSU companies which came out with issues, is also causing concern in the market. Investors are expected to receive shares of CMC, Dredging Corporation, GAIL and IBP in the next few days. The market, which opened firm could not sustain the stock prices at higher levels and fell continuously as the day progressed. At close, the BSE Sensex was down by 179.74 points (3.15 per cent) at 5,520.66 and NSE's S&P CNX Nifty was down by 48.80 points (2.76 per cent) at 1,763.80 Several FIIs are also understood to have sold large quantity of index stocks. Some of the index stocks that came under heavy selling included Tata Steel, Tata Motors, Reliance Energy and SBI. Among the sectors, the worst affected was steel, as a leading foreign broking firm downgraded Tata Steel stocks. In addition, there was concern over rise in the input cost for steel companies and on the other hand, fall in steel prices in China. The mood in the market remained bearish at close as brokers feel more selling to come in the next few days. "With the technical barrier of 5,551 for Sensex being broken, more selling is likely to come from day traders," said a dealer.
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