Pivotals take a beating as panic selling grips market

Pivotals take a beating as panic selling grips market

Spooked SEs: Sensex skids 447 points to a 3-month low

Pivotals take a beating as panic selling grips market

The Bombay Stock Exchange benchmark Sensex tanked 447 points to close the day at a three-month low level on panic selling by funds mirroring weak world markets, which were spooked by reports of a bank failure in Spain.

The BSE 30-share index dropped 509.40 points in intra-day to trade below the 16,000-level. It finally settled the day at 16,022.48, down 447.02 points, or 2.71 per cent. The last time it closed at this level was on February 15. The broad-based National Stock Exchange’s 50-share Nifty index also plunged 2.78 per cent to close at 4.806.75 points.
North Korean leader Kim Jong-il has told his military that the country may have to go to war if the South attacks, with angry rhetoric on both sides having stepped up in recent weeks.

That apart, Spain’s apex bank took control of regional savings outfit Cajasur after board refused a merger plan, which reminded investors that the world is still to recover from a banking crisis altogether, following weeks of anxiety over how to halt a debt crisis begun in Greece from deepening.

 Sustained selling by foreign funds weighed on investor sentiment at Dalal Street. FIIs have sold shares worth a net Rs 10,903.41 crore till now this month (May 24, 2010), according to data obtained from the bourses. They (FIIs) had bought stocks worth a net of Rs 2,667.35 crore last month, while domestic funds have bought stocks worth a net of Rs 5,210.89 crore till May 24.

Broad base decline
The decline on the domestic bourses was broad based, with all sectoral indices in the red and the market breadth weak. The market opened on a weak note tracking lower Asian stocks thereafter extending losses with Sensex tumbling to its lowest level in 3 months in mid-morning trade. Weakness continued in afternoon trade as weak opening of European market further dampened the sentiment, even as the market extended losses in mid-afternoon trade and the Sensex at BSE regained the psychological 16,000 mark soon after falling below that level.  As far as broader indices, BSE Mid-Cap index fell 3 per cent, while BSE Small-Cap index fell 3.43 per cent.

Weak market breadth
The market breadth was weak with as many as 2,330 shares declined as compared to 488 stocks that rose and total 60 scrips remained unchanged during the day. Volume was high as markets reported total turnover of Rs 1,65,791.03 crore, which included Rs 3,592.39 crore from the BSE cash segment, Rs 12,572.98 crore from the NSE cash segment and the remainder Rs 1,49,625.66 crore from the NSE future & options.
“In domestic market, investors are already cautious ahead of Thursday’s derivative settlement and in this situation any bad news from global markets can drag the indices,”a trader said.
DH News Service