The Hindu Business Line : Another Thursday fall; Sensex loses 120 points

THE bulls must be literally seeing red on Thursdays. The stock market has crashed every Thursday since January 10 this year; and today was no different.

The Bombay Stock Exchange's Sensex lost 2.18 per cent of its value on sustained pounding by bearish investors who sold heavy quantities of key stocks in the 30-share index. All except two Sensex stocks were in the red today. It lost 120.75 points by end of trading, the eighth straight session that it has fallen, and closed at 5414.94. Technical analysts say it is headed lower.

The broader 50-share benchmark of the National Stock Exchange, the S&P CNX Nifty, lost 1.9 per cent to close at 1716.65. Many chartists believe weakness persists in that index too.

Pressure began to mount on the indices from the opening bell itself with bears dumping stocks of refining companies such as Reliance Industries, HPCL, IOC and BPCL on fears that surging international crude oil prices would squeeze their margins. Auto and steel company stocks too came under selling pressure as trading progressed.

According to a dealer with a local broking firm, there are no positive news in the market and several investors are unwilling to take a view beyond elections. He also added that faced with redemption pressure from banks, some mutual funds had added to the selling. Trading volume remained thin in the market with the NSE witnessing the lowest volume in March at Rs 4,419 crore compared to Rs 4,648 crore yesterday.

"The downward drift continues and the Sensex has not yet found the bottom. I feel it may go down another 200-300 points," said Mr Sanjay Vaid, head of institutional sales at JetAge Securities. According to a foreign broking firm, the index is likely to break the level of 4972 in the near term.

Another institutional broker said stock volumes suggested speculative unwinding by operators. "For example, delivery volume was a mere 31.5 lakh shares in Reliance, 4.6 lakh in SBI, 9.1 lakh in Tata Motors and 6.7 lakh in Tisco; significantly lower than the usual delivery volumes," he said.

Some brokers, however, see the current fall as an investment opportunity. "I feel people with a long-term view should take advantage of the weakness. Another 5 per cent fall would be an opportunity to buy," Mr Sushkil Choksey of Rosy Blue Securities advises those with a view beyond elections. Mr Choksey picks automobile, auto ancillaries, infrastructure, textiles, banking and polymers as his favourite sectors.

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