Markets volatile, Sensex falls 76 pts

Stock markets continued to remain volatile on Monday. The benchmark Sensex ended 76 points lower on late short-covering by operators and buy...

Stock markets continued to remain volatile on Monday. The benchmark Sensex ended 76 points lower on late short-covering by operators and buying support from retailers.

After a sharp fall of 170 points within 10 minutes of trading, the BSE benchmark 30-share index later made rebound from its intra-day low of 4665.21 and fluctuated erratically before ending at 4759.62 as against Friday’s close of 4835.39, a net fall of 75.77 points or 1.57 per cent.

In a roller-coaster ride, the BSE barometer fluctuated widely in range of 4830.08 and 4665.21 following heavy selling pressure in PSU and banking sectors.

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“There are too many negatives and uncertainties right now with regards to oil prices and the new government’s economic policy. Investors are just going to wait till the budget before taking a call on the market,” said Nandan Chakraborty, research head at Enam Securities.

The market declined sharply in early trades amid concerns that oil prices may go up further and that foreign funds may increase their sales in the wake of political worries. In the afternoon, investors looked for bargains at the lower levels, especially in the tech sector, which is unlikely to be affected by political developments.

“The finance minister has said he will come to Mumbai later this week to meet with foreign institutional investors and the market regulator — that could provide a near-term trigger for a bounce-back. But otherwise, even the budget could be a non-event, as long as there are no negative surprises,’’ said Vipul Sanghvi, senior manager of institutional sales at Fortis Securities.

Oil and power companies were rattled by security concerns in Saudi Arabia, the world’s biggest crude oil exporter. Though crude oil last week fell below $40 per barrel, violence over the weekend in Saudi Arabia has raised concerns over supplies. At the same time, fears are also gaining ground that FII selling may intensify.

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Attributing the partial recovery to buying support by operators after the mid-session, brokers said operators covered short positions after heavy sell-off last weekend and at early stages of the session this morning.

Initially, investors pressed sales on fears of reversal of economic reforms as well as withdrawal by foreign funds. Foreign institutional investors (FIIs) have withdrawn $800 million from capital markets in May.

IT stocks, however, scored impressive gains on fairly good buying support. The broad-based BSE-100 index fell by 43.05 points to 2525.35 from previous close of 2568.40.

Meanwhile, the rupee fell to 45.45/47 from Friday’s 45.47/49 close on fears that foreign investors, whose money helped propel the stock market to record highs earlier this year, would be scared off by India’s shift to the Left. Power companies and banks were again among the biggest losers on Monday.