The Hindu Business Line : Bear hug squeezes Sensex of 327 pts

The key BSE-30 Sensex fell 327.19 points or 3.15 per cent to 10,071.42 points from the previous close of 10,398.61. The index has lost 2,147.36 points or 17.57 per cent over the last one month, after touching 12,218.78 on May 2, 2006.

The NSE's S&P CNX Nifty index closed at 2,962.25, down 108.8 points or 3.54 per cent from the previous close of 3,071.05, the first time since February 17 that the index has ended below 3,000.

Tracking US and Asian markets, the Sensex rose about 200 points in early trade, but heavy selling at those levels put the market under pressure, said dealers.

"There is no depth in the market. Any kind of selling, even if small in quantity, is having a big impact," said Mr Rahul Rege, Senior Vice-President of Sharekhan Ltd.

But foreign funds, which pulled out over $1.8 billion (Rs 7,886 crore) in May, seemed to have slowed down their selling spree, said dealers.

Provisional figures by the NSE showed that FIIs were net sellers for a relatively small amount of Rs 122 crore on Thursday.

Mr Alok Vajpeyi, Vice-Chairman and Managing Director of financial services firm Dawnay, Day AV, said that the market would remain volatile for some more time.

However, he added, the Indian stock markets - across sectors - would give 15-20 per cent returns over the next three years.

Despite better-than-expected sales numbers for May, Maruti Udyog was the biggest loser on the Sensex and the Nifty, falling 7.23 per cent to Rs 681.75 and 6.99 per cent to Rs 683.60 respectively.

Other major losers in the Sensex were Hindalco (down 6.41 per cent to Rs 166.50), Tata Motors (6.24 per cent to Rs 740.40), and L&T (5.95 per cent to Rs 2,180.40).

On the Nifty, Dabur (down 6.82 per cent to Rs 125.70) and Reliance Energy (6.74 per cent to Rs 459.35) were other major losers.

Among indices, the BSE Metal index recorded the biggest fall at 5.61 per cent, followed by the BSE Auto index, which dropped 4.80 per cent.

Market breadth was overwhelmingly negative, with 2,009 stocks ending in negative territory against 433 advances. Except for two (ICICI Bank and BHEL), all stocks on the 30-share Sensex ended in the red.

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