Financial Daily from THE HINDU group of publications
Wednesday, May 22, 2002

Port Info

Group Sites

Home Page - Stock Markets
Markets - Stock Markets

Sensex down 96 points; gold zooms to new high

Our Bureau

STOCK EXPRESSION: A broker in pensive mood on Tuesday.

MUMBAI, May 21

TENSIONS across India's border with Pakistan continued to drive stock values down on panic selling, pushing the benchmark indices down for the sixth session in a row.

BSE Sensex fell to a six-month low of 3186.53 points, the previous low being set in November 2001.

In today's trading, the BSE Sensex fell by 155 points intra-day but recovered some of the losses on moderate purchases. The Sensex ended down by 96.28 points (2.93 per cent) at 3186.53. On NSE, S&P CNX Nifty index too witnessed similar volatility and closed at 1049.20, down 25.15 points (2.34 per cent). Share prices declined across the board as evident in the magnitude of the fall in stock indices, which dipped almost by same percentages. The BSE 100 index fell by 2.38 per cent, the BSE 200 Index by 2.37 per cent and the BSE 500 index by 2.5 per cent.

Gold prices up: Gold prices zoomed to a seven-year high, with 24-carat gold touching Rs 5,235 per 10 gm and 10 tola bar rising to Rs 61,500. Silver was also at a high of Rs 8,210 per kg (.999 fineness). However, the rupee recovered by five paise to 48.98/99 on heavy selling of the US dollar. Securities also improved by around 25-30 paise.

"There were concerns in the market over war between India and Pakistan. But, part of this has already been discounted in the last few days," said Mr Ramdeo Agrawal, Joint Managing Director, Motilal Oswal Securities.

Mr Agrawal feels the fall in the stock prices is also due to lack of buying and heavy selling. However, he expects good buying opportunities at these levels.

According to Mr Sandeep Tandon, Head of Equities, Refco-Sify Securities, when the stock market session commenced, the technical barrier of 3280 was broken. This led to heavy selling on the market. "Long positions of around Rs 2,200 crore on the derivatives market also caused concern among market players," he said.

A large number of derivatives contracts are expected to expire on May 30 (the last Thursday of the month).

Many leading index stocks like Infosys, HLL, Satyam Computers, Zee Telefilms closed lower. Other stocks in the loser category included Shyam Telecom, HFCL, TV18, UTI Bank, Saregama. However, IPCL continued to remain firm and touched its 52-week high of Rs 153.70 before ending at Rs 147.10 on BSE.

Dealers said there could be technical correction with some rise in stock prices over the next couple of days. Nevertheless, the mood in the market is still bearish.

According to Mr Ved Prakash Chaturvedi, Chief Executive Officer, Tata TD Waterhouse AMC, there are three factors governing the markets - geo-political uncertainty, impact of recent developments in the gilt market and hedge funds cutting exposure.

Still, most analysts expect the markets to bottom out shortly. "The talk of war has been going on in the market for the past five to six days, but the situation got aggravated today. I would say that at least 60 to 70 per cent of the impact of the possibility of a war were factored in today at the bourses. The markets should start to bottom out from tomorrow," said Mr Gurunath Mudlapur, Head Equity Research, Khandwala Securities.

Send this article to Friends by E-Mail

Stories in this Section
Nocil shuts Thane petrochem unit

Security clearances hold up Bharti's ILD
Sensex down 96 points; gold zooms to new high
Shyam Tele among 39 FDI cases cleared
MNC investment plans `drugged' in patents
Musical chair in Economic Ministries

The Hindu Group: Home | About Us | Copyright | Archives | Contacts | Subscription
Group Sites: The Hindu | Business Line | The Sportstar | Frontline | Home |

Copyright 2002, The Hindu Business Line. Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of The Hindu Business Line