Sensex crashes above 300 pts, opens at 13,045.12

Mumbai, Feb 28 (UNI) The BSE sensex today crashed by around 325 points and quoted a low at 13,045.12 against 13,478.83 on the previous day's close on sustained heavy selling pressure by local operators.

The BSE Sensex tumbled in the opening session led by a sharp fall across global markets. Later, the 30-shares BSE Sensex was down by 457.72 points to close at 13,011.25. It had opened with a yawning downward gap, at 13, 045.12, and tumbled to a low of 12,800.91, as selling intensified. Its high for the day was at 13,072.67.

All 30 constitutents of the Sensex pack were under pressure.

ICICI Bank was the top loser, down 5.49 per cent to Rs 827.60, on a volume of 61,549 shares.

Gujarat Ambuja (down 4.77 per cent), HDFC Bank (down 4.43 per cent) and Dr Reddy's (down 4.77 per cent) were the other major losers.

Index heavyweight RIL was down 2.03 per cent to Rs 1376.45, on a volume of 2.76 lakh shares.

The market is having a bumping ride to the day of the Budget. Lack of inflows at higher levels, high valuations, inflation and rising interest rates, fears of earnings slowdown in coming quarters, and profit taking at higher levels returned to haunt the market.

From an all-time high of 14, 723.88 struck on February 9, the BSE Sensex has already tumbled 1,245 points, to 13,478.83 by February 27. Circuits filters will be applied only if markets go up or down by 10 per cent. If this happens, then trading will be halted by an hour before 1300 hrs. But if it happens between 1300 hrs and 1430 hrs, then the market will be shut for 30 minutes. If the same happens after 1430 hrs, then there will be no more trading for the day.

Also second circuit filter of 15 per cent is hit, then trade will be halted for 2 hours, if the situation arises before 1300 hrs. But if it happens between 1300 hrs and 1400 hrs, then one hour halt. And if it happens after 1400 hrs, then markets will be shut for the day.

In the worst case scenario, if the 20 per cent circuit is hit, then trading will be halted for the entire day.

On Tuesday, Chinese stocks plunged nearly 9 per cent, erasing about USD 140 billion of value in their biggest fall for a decade, amid fears that authorities would crack down on the speculation that had driven shares to record highs. The tumble came a day after the main index jumped to an all-time high, cutting its gains for 2007 to 14 per cent.

Marketmen attributed the plunge in China to speculation. China's main stock index opened lower today but recovered quickly and moved into positive territory as heavily weighted financial blue-chips climbed.

Marketmen fear that short-term capital gains tax on the sale of shares may be hiked from 10 per cent to between 12.5 per cent and 15 per cent in the Budget. The securities transaction tax (STT) may also go up further. The STT was raised in the previous Budget. The removal of 10 per cent corporate surcharge may be offset by removal of certain open-ended exemptions. On the flip side, analysts also expect the Finance Minister to give a big impetus to agriculture and infrastructure in the Budget, brokers added.

UNI