The Hindu Business Line : Bull run hits pause button

The dizzying rise in the stock markets paused today as the indices went on a tailspin to their biggest drop in four months. FIIs significantly unwound their positions in the derivatives segment and a fear of drop in liquidity in the markets was the reason for the selling frenzy, according to market experts.

The Sensex shed 216.82 points to close at 10,508.85, losing two per cent the day's trade. At the NSE, the Nifty dipped to an intra-day low of 3,107.90 before closing at 3,116.70, a loss of 2.08 per cent.

With the markets on a unilateral upward movement, analysts have seen a correction as imminent and necessary.

Mr Ramdeo Agarwal, Joint Managing Director of Motilal Oswal Securities Ltd, said that the markets looked weak after the international equity markets and commodities market fell yesterday.

"Commodities prices were stretched and a correction was overdue in the Indian stock markets. The markets have run up 2,500 points and a correction is good."

Mr Agarwal added that for the long term he was bullish on the markets.

Metal stocks including SAIL and Tata Steel were some of the bigger losers on the Nifty. SAIL shed 4.63 per cent to close at Rs 64.85.

Hindalco also had a bearish run, with the scrip closing down by over five per cent at Rs 158.55.

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