Sensex reels as bears rule roost on Dalal Street

The investor sentiment turned edgy also due to huge selling by foreign funds last month. The popular Sensex at BSE slipped below the 18,000 level in an intraday trade — a psychologically important level — for the first time since August 31, 2010, pulled down by selling across sectors.

However, the Nifty managed to hold strong 5400-mark, which only seems like a major support for the time being.  Domestic equities underperformed higher global equities. even as world stocks rose as worries over the unrest in Egypt receded.

All 13 sectoral indices on BSE were in the red.  The market breadth was weak, in contrast with positive breadth earlier in the day.  The market slipped into red after firm start triggered by higher Asian stocks. It slumped to five-month low in mid-afternoon trade as stocks extended losses in late trade.

Macroeconomic worries arising from higher crude oil prices weighed on sentiment. Besides, government on Monday, approved a Rs 8,000 crore subsidy to three public sector oil marketing companies to compensate half the revenues they lost on selling diesel, domestic LPG and kerosene below cost for the quarter ended December 31, 2011.

Analysts aver there will be some more negative news to face, especially regarding interest rates and further liquidity tightening. In the sense, they are not calling a bottom yet, which could be about 17K-odd on Sensex.

The BSE 30-share Sensex was down 305.54 points or 1.67 per cent to close at 18,022.22 points, its lowest closing level since August 31, 2010. It shed 345.59 points at the day’s low in late trade and gained 124.30 points at the day’s high in early trade.

The 50-unit S&P CNX Nifty was down 88.70 points or 1.61 per cent to settle at 5,417.20, its lowest closing level since August 31, 2010. The Nifty hit a low of 5,402 in late trade.