Sensex tanks on global cues, freak trade

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Our Bureau

Mumbai, June 1

As global markets tumbled on a slowdown in Chinese manufacturing data the Sensex closed down 372 points, at 16,572 on Tuesday.

This ends the benchmark index's four-day winning streak when it had gained close to 1,000 points. It is also the lowest level the Sensex has fallen to since February this year.

Freak trade

The index dipped more than 600 points during the day, due to a “freak trade” which took place with regard to index heavy-weight Reliance Industries. RIL slipped nearly 20 per cent intraday when its shares were “mistakenly” sold by an investor at Rs 840.55, down from Monday's closing price of Rs 1,045.05.

But the stock recovered moments later. The broader Nifty closed at 4970, down 2.28 per cent from Monday's close.

The Chinese Purchase Manager's Index fell considerably, raising concerns of a slowdown in the fastest growing economy. The worry was that it would have a ripple effect on countries heavily dependant on China, analysts said. FIIs continued to be net sellers for the sixth consecutive trading session.

They were net sellers of equity on Tuesday to the tune of Rs 526 crore. Domestic institutions were net buyers for Rs 210 crore and retail investors (only on BSE) for Rs 28 crore.


Bad news emanating from the Euro Zone coupled with the rupee's weakness against the dollar also led to a surge in the price of gold, usually viewed as a safe haven investment. Standard gold rose Rs 345 to close at Rs 18,750 per 10 gm.

The rupee fell sharply, in a market that saw extremely volatile movement as it tracked the weak equity indices and the euro.

The domestic currency opened at 46.50 and touched a low of 47.20, during the day. It closed at 47.15/16, almost 80 paise lower from the previous close of 46.36. There was added pressure on the dollar due to demand from importers, said a forex dealer with a private bank.

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(This article was published in the Business Line print edition dated June 2, 2010)
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