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Our Bureau

Mumbai, Oct. 18 The market’s record-breaking performance on Thursday morning proved short-lived, as the benchmark index ended the day losing 717 points.

The foreign institutional investors remained net sellers for the second day running. FII sold shares worth Rs 1,130.59 crore on Thursday, according to the provisional data released by NSE.

According to traders, a combination of factors led to the selling pressure in the afternoon: Rumours that NSE might impose additional margins on members, a leading FII had liquidated its large position, political uncertainty at the Centre, and continuing confusion on SEBI’s proposal on Participatory Notes.

“The market situation seemed chaotic today as there were rumours floating in the market and in addition people were unwinding their positions in the market, there was genuine selling by FIIs,” said Ms Anita Gandhi, Head of Institutional Business, Arihant Capital Markets.

The benchmark Sensex and Nifty, which touched new highs during the first half of the day, lost heavily in the afternoon session. The Sensex went into a reverse mode in the second half of the trading session and plunged below the 18,000 mark, shedding 717 points from yesterday’s close.

The index closed at 17998.39 after an intra-day high of 19198.66 and a low of 17771.16. The NSE-Nifty fell by 3.75 per cent to 5351.

Amongst the indices which lost heavily was BSE-Bankex, which fell by almost 6 per cent, BSE-Realty dipped by 4.56 per cent, and BSE-PSU fell by 4.26 per cent.

“It is the fear of a possible CRR rate change, in which case the banking sector would be affected substantially,” said Mr Prashant Bhansali, Director, Mehta Equites Ltd.

The marketmen now feel that the days of sustained rally in equity prices are over.

“The absolute bull run is over. From here one should expect only individual stocks and sectors to perform,” Mr Vishwas Agarwal, an independent technical analyst, said. “The Government’s move indicates that it is not in favour of a sustained bull run and wants the market move a tad slower.”

The Government and the regulator realise that an unchecked bull run could lead to corrections at higher levels that could be more disastrous for investors, he said.

Fundamentally, investors should not worry as corporate earnings have been strong, and overseas markets have been performing.

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