The Hindu Business Line : Bloodbath on Dalal St as FIIs exit

Mumbai, Sept. 15 The rout in the global equity markets following the crises at US-based investment banking firms Lehman Brothers and Merrill Lynch shook the Indian stock markets on Monday, sending the benchmark indices plunging by 6 per cent intra-day.

However, late buying helped the indices pare losses to end the day 3 per cent lower.

FIIs were net sellers again, while volumes were thin. “Many FIIs have been selling and taking money out of the emerging markets such as India to strengthen their position back home in US,” said Mr. P K Agarwal, President, Research, Bonanza Portfolio.

The Sensex opened with a negative gap of 434 points but the sentiment was so negative that its free fall continued in the morning session, beating the index to a low of 13150.

Stocks across all the sectors were pulled down, but realty and IT sectors were the worst affected.

Many scrips hit their 52-week and even all-time lows. Reliance Industries hit its 52-week low at Rs 1824 in intra-day trade.

The losses were most for the listed Indian firms in which Lehman have their investments; for instance realty firm Orbit Corporation fell over 18.5 per cent intra day but closed 11.69 per cent lower due to some buying later in the day.

Other blue chips too got hammered as the mood was one of panic. Reliance Infrastrcuture was the top loser among the Sensex scrips, closing 9.72 per cent lower.

At the end of the day BSE Mid –cap index was down 4.5 per cent and the BSE Small cap down 4.93 per cent.

Domestic buying

Among the market participants, FIIs were net sellers of stocks for Rs 763 crore. Domestic institutional investors (DIIs) bought scrips that looked much cheaper and were net buyers of stocks for Rs 1328 crore, according to the combined data for BSE and NSE trades.

“FIIs who bought Indian stocks at an exchange rate of 40-41 are facing problems due to fall in equities and in the rupee. More selling is expected,” said Mr. Alex Mathew Head, Research Centre -Geojit Financial Services Ltd.