The Hindu Business Line : Sensex sheds 148 points on weak global markets

THE domestic bourses could not remain insulated from the weak global markets and a strengthening dollar, leading to a 148-point fall in the Sensex on Monday.

With the Asian markets trading weak in the morning, coupled with record high oil prices, analysts' opinions about the markets revolved around weak trades. The indices barely managed to stay in the green on opening bell, sliding down to a free fall subsequently.

Closing at 7,606.17, the Sensex shed 147.83 points at the end of the day to wipe out 1.91 per cent of its value. Post 2:30 p.m., it touched its lowest point intra-day at 7,594.94.

At the NSE, the 50-scrip CNX Nifty shrank by 1.56 per cent with a 36.8-point loss to end trade at 2,324.40.

The markets were anticipating some profit booking on Monday, as there were very few positive cues at the time of going into trade. However, the over 100-point fall witnessed on Monday was not entirely anticipated. Despite this, analysts are loath to predict the onset of corrections. "Only the trend over the next few days will give a definite idea about whether it would be a long drawn-out cooling off or not," said a broker.

Expectations that the US Fed rate would be raised on Monday have added to concerns about continued FII liquidity. Oil prices touched a high of $62.90 on Monday, adding to the liquidity fears in the market. Despite these concerns, market experts are reluctant to predict the initiation of a bear run, just yet.

Mondays' trading was highlighted by a slump in the large cap indices, in comparison to the movements in the small and mid caps. The BSE's small cap index shed 0.4 per cent and its mid-cap index lost only 1.03 per cent, significantly lower compared to the close to 2 per cent fall in larger cap indices.

The volumes traded were marginally below average on Monday. At the BSE, 35.04 crore shares worth Rs 3,378 crore changed hands. The NSE reported a turnover of 46.36 crore shares worth Rs 6,873 crore.

While several foreign institutional investors booked profits on Monday, mutual funds and other domestic investors used the dip in share prices to enter the market, according to dealers.

Fund houses have raised over Rs 3,000 crore in the last three months and have been waiting for an entry opportunity.

Banking stocks were the worst affected in Monday's rally. The BSE Bankex slumped to a 3.33-per cent loss at close of trade.

Union Bank, which lost 5.91 per cent to close at Rs 127.30; Andhra Bank, which closed down by Rs 5.05 at Rs 100.25; and Punjab National Bank, down 4.76 per cent, were the biggest losers in this index.

ICICI Bank, which closed down by Rs 21.65 at Rs 478.45, shed 4.33 per cent in its value on Monday.

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