The Hindu Business Line : Sensex down 388 points

The market opened on a nervous note with the benchmark BSE30 Sensex shedding over 670 points or 6.25 per cent within the first few hours, before short covering and `bottom fishing' helped the market recover. Still, the day ended with the Sensex lower by 388.02 points or 3.60 per cent from the previous close of 10,398.61. With this, the Sensex has lost over 13 per cent in May, the third biggest fall in a month.

NSE's S&P CNX Nifty Index shed 114.25 points or 3.59 per cent to 3,071.05.

After the US stock markets fell over 1.5 per cent on Tuesday, most other markets, including Seoul, Hong Kong and Taipei, were weak on Wednesday. The bearish sentiment was so strong that the market ignored the positive GDP figure data and the advent of monsoon, dealers said.

"The fall was mainly due to weak sentiment following the fall in major global markets," said Mr S.P. Jain, Managing Director, Networth Stock Broking. "The economy is sound and the monsoon has arrived on time. It is just a matter of time before the Indian stock markets start attracting funds flow, especially from hedge funds," he said.

Except for Tata Motors, stocks on the Sensex ended in the red. All stocks representing the Nifty Index, too, ended negative.

The market breadth was overwhelmingly negative with 2,016 stocks from the top 2,443 stocks on the BSE ending in negative territory compared to just 386 stocks ending in the green; 453 stocks were locked in the lower circuit.

"Most retail investors are staying away. We feel that the buying will come once the market stabilises, may be at around 10,800 levels," said Mr Pankaj Shah, CEO, Transwarranty Finance Ltd.

Among the biggest losers on Sensex were ITC Ltd, down 6.54 per cent or Rs 11.55 to Rs 165.10; ICICI Bank (5.92 per cent or Rs 33.75 to Rs 536.05) and Tata Steel (5.63 per cent or Rs 30.80 to Rs 516.70). Nalco was the biggest loser on Nifty, shedding 6.76 per cent.

Mr Sanjay Sinha, Head of Equity, SBI Mutual Fund told Business Line that the fund was a net buyer on Wednesday. "We have lot of cash and we are looking to buy at every dip. Many stocks across sectors are looking attractive at these levels," he said, adding that these included companies in engineering, pharmaceuticals and oil and gas sectors.

Rupee down

Concerns of outflow of foreign funds from the domestic equity market and month end dollar demand by oil companies pushed the rupee to its lowest against the US dollar in three years. However, the home currency recouped some of the losses towards close. The rupee opened at 46.35 and touched a low of 46.54/55 on Wednesday, a level last seen in June 2003. It ended at 46.35/36, about eight paise lower than the earlier close of 46.26/28.

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