The Hindu Business Line : Sensex drops 195; oil cos buck the trend

STOCK prices fell sharply on Thursday in line with the weak trend in global markets. However, shares of oil marketing companies remained firm with oil prices touching a two-month low.

The global market was impacted mainly by the signs of rising US interest rates, dealers said.

Though the market was poised for further correction after Wednesday's fall, today's trading was sharper than expected and was marked by a 100 points drop in Sensex within minutes of opening the market, dealers said.

"Today's dip was triggered by the fall in the global market and due to the heavy speculative positions built up over the past few days," said Mr Rahul Rege, Head of Research (Equities) at retail broking firm Sharekhan.

At close BSE Senex was down by 195.77 points (2.24 per cent) to close at 8,528.70. NSE's S&P CNX Nifty ended with a fall of 65.25 points (2.47 per cent) at 2,579.15. Most of the major markets across the world closed lower. Tokyo's Nikkei index was down 2.2 per cent, Hong Kong's Hang Seng fell 1.4 per cent. Overnight, US's Dow Jones Index fell 1.23 per cent and Nasdaq was down 1.7 per cent.

However, most of the markets ignored weak oil prices, which dipped to $62 a barrel, a 9-week low after the US data showed fall in oil consumption.

However, the fall in mid-cap and small-cap stock was not so high compared to large cap stocks. BSE's mid-cap index fell 1.69 per cent and small-cap index was down 1.53 per cent.

"The markets are witnessing profit booking at higher levels and with second quarter results announcements around the corner, fresh positions should be considered only after assessment of the results," according to an official of Motital Oswal Securities. "At these levels, we believe short-term volatility could persist and therefore advise caution".

However, the oil marketing companies' stock remained firm in an overall depressed market. IOC, HPCL BPCL and IBP stock closed higher from previous close.

Fall in oil prices has come as a welcome relief for oil marketing companies.

The belief is that even though prices of petro products may not be raised, if crude dips below $60, under recovery on account of petrol and diesel will be eliminated," said Mr Arun Kejriwal of KRIS Research.

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Sensex drops 195; oil cos buck the trend