Weak European mkts drag key indices, Sensex loses 108 pts

Written by Markets Bureau | Mumbai, May 13 | Updated: May 15 2008, 05:05am hrs
Overnight gains in the US markets led the benchmark equity indices to open with a positive gap but weak cues in the European bourses coupled with some selling pressure at higher levels dragged the markets down on Tuesday.

The benchmark Sensex of the Bombay Stock Exchanged (BSE) opened with a positive gap of around 150 points but selling presure in the heavy weight oil marketing companies led the index to end at 16,752.86 points, a loss of 108.04 points or 0.64%.

The broader Nifty of the National Stock Exchange (NSE) closed below the psychological mark of 5K at 4,957.80 points, losing 54.85 points or 1.09%.

Among the sectoral indices, BSE Oil & Gas received severe beatings, losing 286.32 points or 2.56%, to end the day at 10,907.37 points. These stocks plunged on the news that the finance ministry had turned down the demand of petroleum ministry to issue oil bonds worth Rs 44,000 crore to partially offset the Rs 77,000 crore losses suffered by oil marketing companies during 2007-08 due to rise in global crude prices.

Some buying was witnessed in consumer durables, FMCG, metal and banking stocks. Subramanyam Pispupati, head of research, Ventura Securities, said, Markets are uncertain now but there are chances that they have bottomed out as the bourses are not reacting to negative news. However, valuations seem very attractive and investors who want to remain in the long-term should not miss this opportunity to enter. We are not keen on the oil and gas sector but are upbeat on IT and power indices.