The Hindu Business Line : Market plunges on Left's ascent

The BSE Sensex, which opened firm, reversed its course mid-way on news reports that the Left would increase pressure on the coalition Government at the Centre.

In West Bengal, the Chief Minister, Mr Buddhadeb Bhattacharjee, led the Left Front to a landslide victory. The CPI (M)-led Left Democratic Front in Kerala scored a decisive victory to wrest power from the Congress-led United Democratic Front. In Tamil Nadu, the DMK alliance of which the CPI (M) and the CPI are partners, gained an absolute majority defeating the AIADMK Government. While the Congress emerged as the single largest party in Assam, the alliance led by it secured an absolute majority in Pondicherry.

The market fall was also aided by nervous selling by a section of traders on rumours that some big market players linked to rogue trader Mr Ketan Parekh may be nailed soon, dealers said.

Profit booking by funds and concern over increasing interest rates following the hike in rates by Fed and rising oil prices also affected the market sentiment, they said.

The benchmark BSE-30 Sensex dropped by 176.97 points or 1.40 per cent to 12,435.41 with heavyweight Reliance Industries Ltd (RIL) losing by 5.26 per cent or Rs 61.60 to Rs 1,108.50. Other major losers were Tata Steel, down by 4.42 per cent or Rs 29.50 to Rs 638.35, followed by Grasim Industries (down Rs 67.55 or 2.86 per cent to Rs 2,304.35) and Tata Power (Rs 572.90, down 2.55 per cent or Rs 15).

The Sensex opened at 1,2,631.54 points and touched the day's high of 12,671.11, before the all round selling sent the stock prices down, dealers said.

NSE's S&P CNX Nifty index fell by 53.2 points or 1.42 per cent to 3,701.5.

Among the top 2,596 stocks in BSE, about 61 per cent ended in the red on Thursday. "A correction was overdue in the market," said Mr Ketan Jhaveri of DH Securities. There was also nervousness among traders after reports indicated that some big individuals in the market were involved with (Mr) Ketan Parekh in trading in the commodities market, he said.

According to another dealer, the market also witnessed some selling pressure after statements made by Left leaders that they would increase pressure on the UPA Government. The Left parties, which are against any hike in petroleum prices, have already caused major dent on the balance sheet of petroleum companies such as HPCL, BPCL and IOC. "There is a feeling that key policy decisions may be delayed due to the Left pressure," he said.

Dealers said the markets are expected to consolidate at current levels, while foreign funds remain invested in the Indian bourses. The FIIs were net buyers for $844.10 million (Rs 3,767.20 crore) in May, making their total investments during this calendar close to $5 billion (Rs 22,243.40 crore).

More Stories on : Politics | Stock Markets

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
Australian wheat deal facing trouble?

RBI to promote retail trade in g-secs

`Tata Tele to focus on wireline this year'

IOC, BPCL, HPCL to lose Rs 7,500 cr in 45 days

Deora to meet PM soon on petro product pricing

`India desirable market for US' energy sector investments'

Market plunges on Left's ascent

Left won't rock UPA boat

Voltas posts 4 pc net profit growth in Q4

Northern States to fuel growth for beer industry this summer

Punjab Tractors: Burmans' nominee appointed non-executive Chairman

Taiwan sees synergy in working with Indian cos

Monsanto restrained from charging Rs 900 for Bt cotton seeds

Fed fund rate hike makes ECBs dearer