Financial Daily from THE HINDU group of publications
Thursday, Sep 22, 2005
Financial Daily from THE HINDU group of publications Thursday, Sep 22, 2005 |
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Stock Markets Markets - Stock Markets Sensex swings 235 points intra-day — Closes 13 points down, small, mid-cap stocks feel the heat Our Bureau
Mumbai , Sept. 21 AFTER a long time, selling powered trading on Wednesday with share prices reversing their upward momentum and closing low. The Bombay Stock Exchange Sensex, which was down by almost 235 points at one point of time, recovered and closed at 8487.14, 13 points down from Tuesday's close. On the National Stock Exchange, S&P CNX Nifty was down 10.7 points at 2567.30. Active buying by local and foreign funds in blue-chip stocks recouped much of losses, triggered earlier by media reports that market regulators and other authorities may launch an investigation into the longstanding bull-run. A 25 basis-point hike in interest rates by the US Fed also fuelled the selling. Large-cap stocks recovered most of the losses, while small and mid-cap suffered carnage as highly leveraged positions of traders led to panic selling. The heavy selling in stocks was visible in the advance-decline ratio of the BSE, where nine stocks declined for a rise in every one share. The market had opened slightly higher in the morning. "Over-leveraged positions by traders led to heavy sell-off and the media reports about investigation on the rally aggravated it," said Mr Rahul Rege, Head of Sales at stock broking firm Sharekhan. The small and mid-cap stocks were the worst affected, as there were more sellers than buyers in most of the stocks. The BSE mid-cap index was down 2.68 per cent and the NSE's CNX mid-cap index was down 2.24 per cent. The BSE's small-cap index was down 3.73 per cent. Due to increased volatility, the turnover was one of the highest on the BSE and NSE. On the BSE, the total turnover was Rs 4,994 crore from an average of Rs 3,896 crore. On the NSE, the turnover was Rs 9,217.64 crore. The derivatives segment of the NSE had the highest turnover of Rs 28,780 crore. Mr Rege said that at these levels (8500), volatility of 250 points is likely to persist. "At these levels we are advising our clients to stick to large-cap stocks and reduce their leveraged positions." At close, most of the traders were nervous, but did not see any panic situation as most of them had reduced their leveraged positions. The increased inflows from domestic and foreign institutions have kept the mood upbeat. On Tuesday, the FIIs were net buyers of Rs 322 crore in equity and mutual funds bought Rs 75 crore of equity.
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