FII Inflow Worries Shave 107 Points Off Sensex

Mumbai, Jan 30: | Updated: Jan 31 2004, 05:30am hrs
The lack of fresh buying interest in domestic markets coupled with fears of a slowdown in the pace of investments made by foreign institutional investors (FIIs) led to a free fall of stocks across the board on Friday. After moving in an intra-day range of 169 points, the 30-share BSE Sensitive Index (Sensex) ended 107.08 points or 1.85 per cent lower at 5,695.66.

In a trading session characterised by volatility, the Sensex touched a high of 5,854.29 and a low of 5,685.64 during intra-day trades.

With this fall, the Sensex has now shed nearly 300 points in the last three sessions, after gaining about 400 points in the preceding three sessions. The Sensex has shed 120.98 points for the week and widened its losses for 2004 to 143 points.

The NSE S&P CNX Nifty index also shed 33.85 points, or 1.84 per cent, to end at 1,809.75. Meanwhile, FIIs were net sellers to the tune of Rs 29.80 crore on Thursday.

Despite dealers at large expressing concerns of lack of any fresh buying interest in the markets and a slowdown in the pace of FII buying in the wake of rising interest rates in the US, there is a school of thought that this is only a technical correction that the markets are witnessing of late.

Motilal Oswal, managing director, Motilal Oswal Securities for instance is an optimist: The market fundamentals are still in place and the corporate earning numbers are excellent. This is merely a technical correction that we are witnessing at this point of time and is healthy for the markets on a long term.

Among newsmakers, PSU power equipment major Bhel closed at Rs 512.75, down 7.62 per cent from its previous close. Other power sector pivotals Tata Power (down 4.52 per cent to Rs 375.10) and Reliance Energy (down 3.16 per cent to Rs 536.20) also lost ground on selling.Index heavyweight State Bank of India (down 4.52 per cent to Rs 595.80) ended lower on selling after the companys quarterly results failed to impress. Other heavyweights Reliance Industries (down 1.82 per cent to Rs 559.60) and ITC also contributed to the weakness of the Sensex.