Markets snap rally, dip over 4%

Written by fe Bureau | Mumbai | Updated: Mar 31 2009, 05:43am hrs
Domestic bourses started the day with huge losses, after witnessing an upward rally during the past few weeks. Indices closed deep in the red on Monday, thereby recording one of the steepest drops in a day during the past two months. Weak global cues, coupled with short covering and renewed fears about the fate of the US auto industry also impacted the markets.

The 30-share Sensex of the Bombay Stock Exchange (BSE) closed at 9,568.14 points, down by 480.35 points, or 4.78%. The broader S&P CNX Nifty of the National Stock Exchange (NSE) was down by 130.50 points, or 4.20%, and ended the day at 2,978.15 points.

The interest rate-sensitive sectors like Realty and Banking took a huge beating on the domestic bourses, as investors booked profits. Dealers in the market said that fund managers also booked profits, as the quarter and fiscal year ends on Tuesday.

Ajay Parmar, research head at Emkay share and stock brokers, said, We have to wait for a few more days to see how the markets shape up.

Earlier in the day, Indian equity indices started below the dotted line and continued to trade in a range-bound manner. Indian markets had reacted sharply to global markets in during the past couple of trading sessions; today was no different. In addition, there was some short covering in the markets during the past few trading sessions, but today, we lacked triggers and the markets ended with losses, said Anil Advani, head of research, SBI Cap Securities.

Consumer Durables (CD) and Health Care (HC) were the only sectors on the BSE Sectoral indices that closed with some gains on Monday. Realty and Bankex were the worst performers of the day.

Dealers in the market said that investors are treading with caution, as the countrys economy is slowing and there is uncertainty on the political front ahead of the imminent general elections. Further fiscal and monetary policy measures might be needed to boost the economy; it is feared that the economy may fare worse than last year, said dealers.

Foreign institutional investors (FIIs), who, till last week were on the buying side, suddenly were net sellers at Rs 270.70 crore.

There are chances that till the elections, there will not be much action on the FII front. However, it is quite difficult to predict the market movements and we might witness more volatility in the coming days, said an analyst from a leading broking house.

The market breadth remained weak on Monday, as out of 2,473 stocks traded on the BSE, only 904 advanced; 1,471 stocks declined while 98 remained unchanged.

Among the Sensex pack, 28 stocks ended in red and the remaining two closed in green.

Dealers in the market said that in the ensuing days too, domestic markets will take the cue from their Western counterparts. They noted that till the quarterly earnings season starts mid-April, domestic markets are likely to remain under pressure.