Pranab's comments dampen markets, Sensex dips 324 pts

Geopolitical jitters also influence mood

After closing higher in the past two days, the Bombay Stock Exchange benchmark Sensex fell sharply by 323.99 points, or 2.33 per cent, to 13,589.23 on selling pressure across counters barring IT.

The bellwether index swung between a low of 13,518.79 and a high of 13,991.46 points. Marketmen said the markets hit a trading low of 13,518.79 in the afternoon trade after Mukherjee in an interview to private television news channel CNBC TV 18 said the government will concentrate on growth momentum and fiscal prudence.

The broader 50-share Nifty of the National Stock Exchange fell sharply by 120.85 points or 2.85 per cent to close at 4,116.70 from its last close. Brokers said cues from global markets were also weak after North Korean tested nuclear device. Asian indices ended in the negative territory while European markets were substantially lower in their early trade.

Retail investors

Reports that North Korea fired two short-range missiles from its east coast on Monday, a day after it tested a nuclear device, resulted in geopolitical jitters. Brokers said retail investors and funds took out money from small and medium size shares, which were on upward march in the recent past.

Midcap index fell by 3.40 per cent to 4,724.09 and small cap index by 3.12 per cent to 5,608.66 points. Foreign Institutional Investors (FIIs) were believed to be covering short positions at the month-end. They bought shares worth Rs 427.97 crore in equity on May 25, as per provisional numbers on the NSE.

IT shares, however, bucked the trend as Indian rupee weakened against dollar. The market breadth was slightly negative with 1,454 losers against 1,323 gainers on the BSE. The business volue dropped sharply to Rs 6,938.19 crore from Rs 7,327.05 crore on Monday. Reliance Cap was most active scrip with highest turnover of Rs 262.07 crore followed by HDIL (Rs 230.95 crore), RIL (Rs 178.20 crore), Unitech (Rs 169.93 crore) and RNRL (Rs 159.38 crore).

In Sectorial indices, the BSE Realty index dipped by 3.96 per cent, the Bankex by 3.13 per cent, the BSE CG Index by 3.06 per cent and the BSE CD index by 3.01 per cent.