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Correction in markets by 350 points as FIIs book profit

Written by: Staff

Mumbai, Apr 15: It was the first weekly loss for the Sensitive Index(Sensex) of the Bombay Stock Exchange (BSE) by 352.21 points after seven successive weeks of bull run.

The Sensex closed at 11,237.23 points on Thursday as compared to the previous week's close of 11,589.44.

The National Stock Exchange (NSE) S&P CNX Nifty index, too, closed 109.30 points down at 3,345.50 as compared to the last close of 3,454.80.

The foreign institutional investors(FIIs) selling both in the cash and futures markets in the last four sessions had a corrective effect on the markets pulling Sensex to a low of 11,008 on Thursday from an all time high of 11,930 point in the preious week.

The investors have been guided by FIIs activity in the present bull run and Rs 1,583.60 crore selling by FIIs in the last four trading session as per SEBI report, led to major correction in the markets.

However, the corrections were expected as the valuations in the market of several scrips had been over stretched.

On Monday, in a choppy session the benchmark index settled 71 points higher at 11,662 as compared to the last close of 11,589.

Metal companies were the major gainers and helped the Sensex close in the green.

On Tuesday, markets were closed on the occasion of Mahavir Jayanti and Id-e-Milad.

On Wednesday, soon after opening, the 30-share Sensitive Index (Sensex) crossed the 11,700 mark while touching a high of 11,702.77.

But it started slipping in the afternoon as Foreign Institutional Investors'(FIIs) sellout in Future and Options(F&O) market in large sum on Monday as reported by SEBI, triggered panic selling leading to a 400 point intra-day fall to 11,302.78.

More than 300 points fall on Sensex led to the key index settle 2.63 per cent or 306.82 points at 11,355.73 points as compared to the last close of 11,662.

On Thursday,investors panicked once again leading to 347 points intra-day fall around 1200 hrs on the sensitive index(Sensex) of the Bombay Stock Exchange(BSE).

However, there was a bounceback later in the afternoon which prevented the repeat of 306 points fall on the Sensex yesterday, as the benchmark index closed 118 point down at 11,237 points On Friday, markets were closed on the occasion of Good Friday.

The fall in the equity markets was led by maximum losses for BSE Information Technology, FMCG and Banking indices by more than 4.5 per cent. The BSE Metal index however bucked the trend and gained 2.4 per cent during the week.

Among the blue chips scrips drug major Cipla and software major Satyam Computer lost around ten per cent.

Private sector banking major ICICI Bank and HDFC Bank lost around nine per cent.

Telecom major Videsh Sanchar Nigam Limited(VSNL) was the leading loser among the midcap stocks falling by around 12 per cent. Another telecom company MTNL also registered losses.

The blue chips that gained during the week were Tata Steel up by five per cent; aluminium major Hindalco as well as Dr Reddy's Lab.

gained around 2.5 per cent.

Reliance Industries too touched a new high Rs 852.40 on Thursday before closing at Rs 847.05 on te back of tremendous response to the Reliance Petroleum Limited's(RPL) initial public offer(IPO).

RPL IPO which opened on Thursday was oversubscribed eight times on the very first day.

While majority of the sectors witnessed decline, metal, cement and sugar stocks were in demand this week as global prices of several metals touched new highs.

Sterlite Industries, Hindustan Zinc were the major gainers among the metal companies.

Associated Cement Company(ACC) which announced 42 per cent rise in the quarterly profit for the period ended on March 31, 2006 was another major gainer this week, Gujarat Ambuja Cements too gained heavily closing at Rs 108.75 on Thursday.


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