Our Markets Bureau

Mumbai, June 6: INITIAL gains were wiped out after the sentiment turned bearish as unabated selling from domestic mutual funds continued coupled with profit-booking from FIIs.

This tendency forced the operators to unwind their positions. The benchmark Sensex however, lost marginally by 3 points while S&P CNX Nifty gained by a miniscule 0.10 points.

The markets closed in the negative zone for the sixth consecutive day.

The markets opened better as Nasdaq and Dow closed higher by about 78 points and 115 points respectively in US. Sensex opened at 3473.32 and rallied mildly to cross 3500-level to the intra-day high of 3507.24.

However, it retracted later due to the resistance and closed at 3457.31, netting a small loss of 2.73 points. Nifty on the other hand gained marginally by 0.10 points to close at 1115.70.

With the buoyancy in the US markets, Indian ADRs were firm with Infosys moving up by $6 helping the sentiments at the domestic markets to change to neutral from bearish, said a leading fund manager.

In technical terms, it was a pull back. However, the pull back rally lasted for only two hours, then the euphoria fizzled off, as local funds and FIIs started booking profits, forcing the operators to square off their positions.
The outlook is still very bleak as in the medium-term investors have to get adjusted to the new derivative products, he added. Sensex remained in the red mainly due to losses in heavy-weights like RIL, ACC, Tata Engineering and Tata Steel.

FIIs activity was restricted to IT counters like Infosys Technologies, Hughes Software, Pentamedia Graphics and Satyam Computer. A leading foreign fund, however, made sizeable sales in select counters after the mid-session.

Unit Trust of India believed to have sold shares of RIL at the prevailing market rates, sources added.
The volume was sharply down at Rs 1,017.83 crore on Wednesday compared to previous turnover of Rs 1,458.08 crore.