The Hindu Business Line : Sensex down 130 on bearish sentiment

A HOST of factors primarily led by the rate increase by the Reserve Bank of India affected the market sentiment leading to a 129.76-point fall in the Sensex on Friday.

Bearishness in international markets, lower than expected results announced by some of the major corporates and poor FII participation added to the despair in the bourses.

The Sensex dropped 2.06 per cent to close at 6154.44 and the Nifty also shed 2 per cent to end the week at 1902.5.

Banking stocks continued to reel under selling pressure from investors who envisage lower credit offtake and poorer performance for the next quarter.

The BSE's Bankex witnessed the biggest fall today losing 2.89 per cent. The biggest losers were Andhra Bank, which shed 7.17 per cent to close at Rs. 93.20 and Union Bank, which lost 7.02 per cent and ended trade at Rs 98.70.

Bank of India, which announced disappointing results today, also lost over 4.7 per cent and closed at Rs 81.95.

Trading on both the bourses continued to be on below average volumes. The BSE reported trades of 14.92 crore shares worth Rs 1,850.33 crore. At the NSE, volumes were picking up with Friday's trade totalling turnover Rs 4,045 crore and 22.91 crore shares changing hands.

The foreign institutional investors (FIIs) have been net sellers in the market for the last three trading sessions. Stock markets are facing liquidity pressure because of the lack of FII inflows, according to brokers.

With the markets breaching the 6250-support level on the Sensex today, technical analysts are predicting a continuation of the downward trend in the short term.

"There are no clear indications of any kind coming through currently, whether it is in the domestic arena or the international one. There is too much uncertainty now for the market to handle and sentiment will change only if there are definite positive cues," said a broker.

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