The Hindu Business Line : Stocks take a beating; Sensex closes below 19K

Although Muhurat trading is more a ritual and is characterised by thin volumes and low institutional participation, it did seem an anti-climax to a year that saw the Sensex climb 8,000 points from last year’s Muhurat close of 12736.82.

(During the year, the Sensex crossed the 20,000-mark).

Early trade saw the Sensex rise to 19329.57 on Friday, but given that trading time lasted only an hour, it was extremely volatile. It lost almost 600 points intra-day, to hit a low of 18737.22.

The index closed at 18907.60, lower by 0.79 per cent from Thursday. The broader 50-stock Nifty lost 0.62 per cent, closing at 5663.25.

Fridays’ trading is in keeping with the direction of the markets ever since the SEBI restricted the participatory note route for foreign institutional investors. For the last ten days, the benchmark indices have been mostly moving southward.

The direction of Muhurat trading may not be indicative of the year to come, said market participants. But if there is at all any futuristic reading to be made from the Muhurat session, it is that the market is taking a break for the short-term.

“The rally up until now was too quick and not justified, so markets may be taking a breather now. Also there do not seem to be any triggers for a future rally in the short-term now,” said Ms Anita Gandhi, Head of Research at Arihant Capital markets.

The market has had a big run-up and so it is seeking its lowest point where it will bottom out, said Mr Lalit Thakkar, Head of Research at Angel Broking. “But if you see IPOs like Mundra Port’s which received around Rs 2,00,000 crore in subscription, you can say that there is still money coming in.”

Retail investors also kept away having burnt their fingers, said one analyst. “Retail investors had picked up some ‘fancy’ stocks and ended up booking losses, reducing their buying capacity. This has generated some fear in the markets,” said Mr Vishwas Agrawal, independent analyst.

From the last Samvat year, the Sensex is up 48.44 per cent. The mid-cap and small-cap investors appear to have gained even more, the BSE mid-cap up 49.4 per cent and the small-cap up by 50.45 per cent.

IT stocks, however, have not done too well, dragged down by the rupee appreciation. The IT index lost 11.24 per cent over the year.

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