The Hindu Business Line : Sensex misses 10,000-mark; drops sharply

IT was a summit denied as the BSE Sensex came within striking distance of the 10,000-point mark, but dipped sharply thereafter in Wednesday's volatile trade. The Sensex opened at 9,959.24, touched a high of 9,993.92 points and closed at 9,859.26 points, down 60.63 points.

"There was a good amount of selling in mid-cap and small cap shares today," said Mr Jayesh Shroff, Fund Manager, BOB Mutual Fund.

The SNP CNX Nifty closed 29.55 points lower at 2,971.55.

In today's trade, the advance decline ratio on BSE was heavier with declines. Both the Sensex and the BSE-100 had more scrips moving down than up.

By the end of trading session, all BSE indices were in the red zone.

Barring a few large cap stocks most had closed lower, dragging the indices down with them.

"The breadth of the market is negative. Also there is some resistance at the new psychological level of 10,000. This was seen at the 9,000-point level too,'' Mr Shroff said.

According to dealers, the prevailing levels offer a good opportunity to exit. However, the overall momentum of the market is upward.

Mutual funds, flush with money, are expected to be active in the capital markets. Dealers feel they are probably waiting for some declines before investing in stocks. FIIs are also expected to continue their purchases on Indian markets. So far in 2006, FIIs have invested $820.30 million.

"The markets are expected to be choppy in the short-run but stay headed upwards," said Mr Mihir Vora, Senior Vice-President, Head-Equities, ABN Amro Asset Management.

Among the Sensex stocks, HDFC Bank, ICICI Bank, Reliance Energy, Ranbaxy and Gujarat Ambuja fell by more than 3 three per cent. But Larsen & Toubro and Dr Reddy's Laboratories moved up by more than 5 per cent. Most of the bank stocks were down in Wednesday's trade. The hike in repo rates is seen hurting their profit margins, dealers said.

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