Financial Daily from THE HINDU group of publications
Saturday, Apr 08, 2006
Financial Daily from THE HINDU group of publications Saturday, Apr 08, 2006 |
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Regulatory Bodies & Rulings Markets - Stock Markets Our Bureau
Market mood At every dip in the market today, there was heavy buying. The BSE reported higher than the average turnover at Rs 6,722 crore. At the NSE, Rs 13,002-crore worth shares were traded. Banking stocks were the worst hit with BSE's Bankex registering a loss of 3.13 per cent.
Mumbai , April 7 The stock markets succumbed to a rumour today and effected a 365-point fall in the Sensex intra-day. Markets opened steady in the morning and the indices stayed in the green during the first few hours of trade. By 12:40 p.m., markets were buzzing with the speculation that nine foreign institutional investors were suspended. Subsequently, this number swelled to 14. The BSE's 30-stock benchmark index touched an intra-day low of 11,564.87 and ended at 11,589.44, down by 157.46 points. At the NSE, the Nifty shed 1.6 per cent to finish the trading week at 3,454.80, down by 56.1 points from Thursday's close.
Heavy selling
Market participants, who have been increasingly nervous because of the unilateral upward movement in the indices, panicked and most counters witnessed heavy selling. In about 40 minutes, stock prices took a tumble and reached their lowest level during the day. The speculations flew thick and fast — while some dealers heard that several FIIs have been asked to square up their derivative positions, others were told that brokers dealing with some of these investors would be raided.
SEBI's stance
The Securities and Exchange Board of India made no clarification on any of these during trading hours. Subsequently, after the end of trade, the SEBI Chairman, Mr M. Damodaran, was quoted as saying that the regulator will ascertain as to who floated these rumours. Market experts say that this would be a difficult job, as SEBI cannot rely on any data or trading information to find the source of these speculative stories. Market participants aver that these rumours were generated by a section of the market that wanted some panic selling in order to buy into some stocks at lower levels. "With no signs of any corrections, the markets have not presented any opportunities for entry into stocks at lower levels. Investors have been waiting at the sidelines ever since the Sensex scaled 7,500. We are likely to see more such speculative volatility if no fundamental correction takes place," said a broker. At every dip in the market today, there was heavy buying. The BSE reported higher than the average turnover at Rs 6,722 crore. At the NSE, Rs 13,002-crore worth shares were traded.
Stock-specific action
Despite the fall and rise in the indices, Infosys remained a favourite of the bourses today. Aided by speculation that the company would be announcing a bonus issue soon, the scrip touched its 52-week high of Rs 3,400 before closing trade at Rs 3,166, a net gain of 1.66 per cent from Thursday's close. Cement and metal scrips provided further support. Banking stocks were the worst hit with BSE's Bankex registering a loss of 3.13 per cent. Vijaya Bank ended trade at a loss of 5.08 per cent at Rs 54.15. Bank of India shed 4.81 per cent and closed at Rs 130.75.
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