On Thursday, the BSE Sensex closed 94.71 points lower at 4729.73 points against its previous close of 4824.44 points, while the S&P CNX Nifty on the NSE closed 34.85 points lower at 1375.85 compared to its Wednesday closing of 1410.70 points. According to Ambareesh Bagila at Kotak Securities, it's the small opeartors and the retail investors who are getting hurt the most from the falling prices. ``After they accrue some loss in a particular scrip, to cover this loss, they are also selling off other scrips where the prices have notgone down that much and creating a spiralling effect on the stock prices,'' Bagila explained.

Despite the positive FII investment figures for the last couple of days, the turnovers on the two exchanges on Thursday were unusually low. While the total turnover on the NSE was at Rs 1805.74 crore (a drop of 26 per cent compared to Wednesday's turnover of Rs 2439.03 crore), the corresponding figure for the BSE was Rs 1461.88 crore (down 29 per cent on Rs 2059.18 crore).

For Friday, the last day of trading in the current settlement on the BSE, market players feel the markets to remain more-or-less weak and is likely to close near today's level. According to Chirag Sanghvi at Asit C Mehta Investment Intermediaries, the recent corrections in the markets are healthy signs. ``For Friday, we are expecting the markets to open lower at around the 4700 level and then recover during the day. However, according to Bagila, there could be another round of correction on Friday and for Monday, it's just wait-and-watch.

OnThursday, for the second day in succession, the Digital scrip was hammered to its lower circuit level and closed with huge sellers offering to unload their position. On the BSE, the volume in the Digital counter was at 32,000 with with another 1.28 lakh ready to be sold, the corresponding figures on the NSE was 66,000 and 3.86 lakh shares, respectively.

Much ado about nothing

The fears about the additional margins imposed by the Bombay Stock Exchange is largely unfounded. According to a dealer with a broking house, going by the margin requirements of the exchange, at the present level there is only one scrip which would call for an additional margin of 5 per cent over the 10 per cent margin that is already being paid by a lot of operators in a number of scrips where carry forward is allowed.

The latest guidelines for the additional margin stipulates that in case the total outstanding position in a single scrip exceeds Rs 200 crore at the gross level or Rs 150 crore at the net level, the scripwould call for an additional margin of 5 per cent (for carry forward). This, according to the dealer, incremental margin can not affect the market in a big way and the talks and the fears about the additional margin are largely the handiwork of a group of people who want to gain from the market's fall by misleading the investors.

FII game-plan

There's money and opportunity in confusion and panic. That appears to be the strategy of FIIs who have once again turned net buyers on the exchange over the last three days. On Wednesday, when speculative unwinding on the markets resumed, FIIs ended the day with a net purchase figure of Rs 48 crore.

With the market losing over 170 points in two days, the FIIs are expected to step in selectively, which may not necessarily reflect in a rise in the Sensex. With the Sensex 5000 euphoria giving way to caution and panic, FIIs are likely to enter non-Sensex scrips, says a broker.

S Muralidhar