Equity prices continued their southward journey for the fifth consecutive trading session on Tuesday on the back of worsening anxiety and constant fall in the international markets.
Dealers in the market said even the finance minister?s statement failed to enhance the market sentiments. The finance minister had earlier said that the government would take steps to stimulate the domestic economy to compensate for the ill-effects of the world economic turmoil.
The 30-share Sensex of Bombay Stock Exchange shed 353.81 points, or 3.81%, and ended at 8,937.20 points. Bourses opened with negative gap and remained under pressure throughout the trading session. Domestic markets made a comeback during the trading session, but weak cues from the European and Asian markets coupled with intense selling pressure by retail investors, drove the markets to end the day with huge loses. Foreign institutional investors were net sellers of Rs 631.90 crore on Tuesday.
Hitesh Agrawal, head of research at Angel Broking, said, ?We are witnessing huge instability which will remain for the next couple of days. Though the condition on the domestic front is improving, domestic markets are taking cues from international markets. So we assume that unless the global condition improves, Indian markets will remain rangebound.?
The broader S&P CNX Nifty of National Stock Exchange (NSE) lost 116.40 points, or 4.16%, to close at 2,683.15 points. An analyst from the leading broking house said, ?There is constant selling pressure from the foreign institutional investors (FII) along with retail investors. This has impacted the markets badly. There?s some more downside left to the market as we have still not reached the bottom.?
All of the BSE sectoral indices ended the day on a negative terrain, with Teck, IT and Power being the worst performers of the day. Dealers in the market say that the Reserve Bank of India (RBI) might take more measures to enhance the liquidity condition in the country.
Meanwhile, CB Bhave chairman of the Securities & Exchange Board of India, in a conference in Mumbai said that the new rules for stock lending and borrowing will be in place within a month and the system will be operational once the software is in place.