The Hindu Business Line : Downtrend continues, Sensex sheds 338 points

Mumbai, March 4 Weak Asian and global cues coupled with the news of sub-prime linked losses of ICICI Bank brought the BSE Sensex down by another 338 points on Tuesday.

This took the total number of points lost by the bench-mark index post the Union Budget to around 1,500 points.

This is the third consecutive session that the market witnessed heavy selling.

The Sensex fell 2.03 per cent to end the day at 16,339.89. The broader CNX S&P Nifty ended the day down 1.79 per cent to end the day at 4,864.25.

The market breadth remained weak with just 497 scrips advancing and 2,198 scrips declining.

The FIIs were net sellers to the tune Rs 512.33 crore, just a day after Rs 711-crore sell off. The domestic institutional investors were net buyers by Rs 170.23 crore. Bank stocks took a hit, following the statement by Minister of State for Finance, Mr P.K. Bansal, on the losses made by ICICI Bank in its overseas operations. Responding to a question raised in the Rajya Sabha, he said that ICICI Bank had an exposure of about $264 million till January 31, 2008 to the sub-prime crisis in the overseas markets.

The Sensex fell over 513 points intra-day to a low of 16,164 points but later staged a comeback following clarifications from the bank.

“It is more to do with sentiments than fundamentals as perception of risk is more than the underlying risk, the market to me seems is near its bottom of 15,000 to 16,000,” said Mr Dinesh Thakkar, CMD, Angel Broking.

ICICI Bank was among the worst losers of the day as it dropped almost five per cent. DLF Ltd, ACC Ltd and Reliance Communications were among the other losers of the day.

On the other hand, the auto index is still attracting investors thanks to this year’s Budget proposals. The BSE auto and metal indices were the only two sectors to end the day in green. Hindalco, Maruti Suzuki and Mahindra and Mahindra were among the few scrips that gained on the bourses today.