Weaker mkts trigger huge correction in Sensex, Nifty

Mumbai, May 20: In one of the heaviest corrections ever in the Indian stock market history, the Bombay Stock Exchange (BSE) Sensitive Index (Sensex) closed 1,346 points lower or 11 per cent at 10938.61 points as compared to the previous week's close of 12,285.11.

The National Stock Exchange (NSE) S&P CNX Nifty index also closed around 11 per cent or 403 points down at 3,246.60 point as compared to the last close of 3,650.

The fall in the Indian market was triggered by the weaker closing of the global markets, influenced by higher inflation and interest rates.

There was big fall in the commodity prices specially of metals globally, which led to severe fall in the metals scrips, off late the metal prices had flared up largely on speculative buying.

The BSE metal index closed 22 per cent lower leading to big fall in scrips like Tata Steel, SAIL, Hindalco, NALCO, Hindustan Zinc and the among the midcap and smallcap metal scrips.

The Foreign Institutional Investors (FIIs) were big sellers throughout the week leading to total net selling by Rs 2495.90 crores in the four trading sessions since Monday.

The proposal to tax the FIIs put-up by the Central Board of Direct Taxes (CBDT) also dampened the market mood.

On Monday, Sensex crashed by 514 points in the afternoon and finally closed down by 3.77 per cent or 462.91 points at 11,822.20 as compared to the last close of 12,285.11.

On Tuesday, The markets staged dramatic recovery with the Sensex closing 51.53 points up at 11,873.73 after it dipped 443 points in the mid-morning session to day's low of 11,378.96 point.

On Wednesday, Markets continued to surprise investors with a strong comeback marked by 344 points gain to 12,218 points on the benchmark index of the BSE.

On Thursday, It was the darkest afternoon in the history of the Indian stock market as the investors' panic marked the biggest ever fall on the stock markets by over 860 points due to meltdown in global indices.

Sensex closed around seven per cent or 826 points down at 11,391 points as compared to the last close of 12,218.

On Friday, The markets crashed again as BSE Sensex fell below 11,000 level with 452 points fall to 10,938 points.

The Sensex was subject to high volatility marking a wild swing of 898.10 points touching an intra-day low of 10,799.01 in the closing hour as compared to the day's high of 11,697 points.The market also became a victim of panic selling as investors, trading with borrowed or margin money, had to exit from the market to escape losses to the brokers or funding institutions.

Besides an across the board selling, the scrips which had risen too fast were subject to huge correction. Thus all the Sensex 30 scrips ended in red both on Thursday and Friday when Sensex lost 826 and 452 points respectively. Metal and cement scrips lost the maximum.

Tata Steel, which announced 14 per cent loss in the fourth quarter results (Q4) made public on Thursday, was the worst victim losing more than 25 per cen or Rs 142.50 at Rs 503.50 as compared to Monday opening price of Rs 645.

Cement blue chips ACC, Gujarat Ambuja Cements and Grasim Industries were doubly impacted as the the Government's attempt to rein in soaring cement prices as well as the bearish market mood coincided.

State Bank of India also suffered heavily as its Q4 result showed 20 per cent dip in the profits. The scrips closed down by more than 10 per cent or Rs 92 at Rs 868 as compared to Monday's opening at Rs 960.

The index heavy weight Hindustan Lever too lost badly closing more than 11 per cent lower at Rs 243 as compared to the last close of Rs 272, a loss of Rs 30.

Another index heavy weight, Reliance Industries, too came down below Rs 1,000 mark closing at Rs 976.55 as compared to Monday's opening at Rs 1,060 losing Rs 83.45 or 7.83 per cent.

Newly listed Reliance Petroleum too closed lower by more than 16 per cent at Rs 72.75 as compared to Monday's opening at Rs 84.

Telecom stock of MTNL and VSNL too lost badly.

Bucking the losing spree were some A category stocks like Adani Export, CONCOR, and Ballarpur Industries.

UNI