A subdued Asian and European equity markets along with absence of any fresh trigger to maintain the current momentum prompted profit booking in the domestic stock market on Monday, pulling down key benchmark equity indices down by nearly 3%.
Amidst high levels of volatility, the 30-share Sensex of the Bombay Stock Exchange (BSE) closed the day at 14,665.92 points, losing 437.63 points or 2.90%. This is the benchmark index?s third largest fall in the year. On the other hand, the Nifty of the National Stock Exchange (NSE) ended the trading session at 4,429.90 points, down by 3.42% or 157 points.
Among its Asian peers, Hang Seng, Straits Times and Taiwan Weighted dropped 2.28%, 2.90% and 3.34% respectively while Japan?s Nikkei 225 recorded a gain of 1%.
Market experts says that the fall in share prices on Monday was not a big surprise given the fact that many of the small and mid cap stocks had recorded a gain of 40% -60% since the beginning of March 2009. In the absence of fresh triggers, investors who were sitting on huge gains since March 2009, took an opportunity to take profits by offloading equities across the board.
According to the provisional figures provided by the stock exchanges, Domestic institutional investors turned net sellers of equity worth Rs 875.92 crore while foreign institutional investors sold net equity worth Rs 14.47 crore.
?Lack of any fresh trigger and weakness in the global market prompted investors back home to book profits. Moreover, lack of clarity on the deregulation of oil prices from the state control also dampened sentiments among investors,? said, Arup Misra, derivative analyst, Elara Capital.