Sensex plummets another 173 pts as panic continues

Thanks to the non-stop bear hammering, around 60 stocks in thespecified list hit the lower circuit and trading was stopped as their prices fell by the permissible eight per cent. In the specified list, almost 80 per cent of the stocks showed a fall of over 5 per cent, one of the worst performances whereas almost 96 per cent of the stocks showed a negative close, clearly reflecting a panic situation.

“There has been sustained unwinding because long positions were saturated," said an institutional dealer, adding that the absence of local institutional demand and selective foreign fund selling added to the depressed mood. "Today, it has been a free fall," a dealer at another local brokerage said, adding the outlook would depend on how much the outstanding positions were scaled down.

Brokers said that the absence of local institutional demand and selective foreign fund selling added to the depressed mood. FIIs are selling stocks as part of the year-end exercise of closing accounts and Y2K millennium bug fears. Despite a sharp drop in the net outstandings at Rs 2683crore from Rs 3507 crore last week and relatively low badla of 18 per cent, bulls resorted to heavy unloading due to the bearish attitude by FIIs who pressed fresh sales in key scrips like Reliance, Larsen, Zee and others.

The intensity of the fall has surprised marketmen. “The market is under the grip of bear operators. The market is looking for support, but it is not forthcoming. Stock exchanges and market regulator SEBI should take measures to stop the slide in share prices. There is no reason for such a steep fall in prices,” said a BSE broker. Only 15 scrips managed to show some gains with Mahindra and Mahindra, which scored handsome rise of Rs 22.10 at Rs 377.60 in the lead following buying from FIs. The Sensex fall could have been more than 250 points had HLL not remained firm. Hindustan Lever which represents around 20 per cent weightage in Sensex was unchanged at Rs 2308.

While selling was visible on every counter, the software sector was under panic attack. Nearly 97 per cent of the softwarestocks hit the lower circuit. Stocks like Pentafour, Digital Equipement, Global Tele, HCL, Silverline, and Himachal Futuristic were first to hit the circuit. Leading scrips like Satyam computer crashed by Rs 93 to Rs 1179, Zee Telefilms by Rs 353.40 to Rs 4064.45, Reliance by Rs 17.55 to Rs 216, Ranbaxy by Rs 69.55 to Rs 800.40, SBI by Rs 19.80 to Rs 228.20, BHEL by Rs 15 to Rs 253, Infosys Tech by Rs 280 to Rs 6668, Larsen by Rs 31.80 to Rs 366.30, NIIT by Rs 105.50 to Rs 2060, ITC by Rs 42.90 to Rs 653.15, MTNL by Rs 12.40 to Rs 159, TELCO by Rs 19.15 to Rs 220.45 and TISCO by Rs 11.05 to Rs 136.45.

FII sales hit rupee
MUMBAI: Heavy offloading by foreign institutional investors in the capital market also dampened the rupee’s value. The rupee weakened against the US greenback and ended two paise lower at 43.39/40on good dollar demand by nationalised banks at the interbank foreign exchange (forex) market today.

The rupee opened steady at 43.37/38, came under pressure on dollar demand andgradually moved downwards as State Bank of India (SBI) and other nationalised banks were purchasing dollar. The Indian unit ended at 43.39/40, two paise lower from the previous day’s closing level of 43.37/38. “The continued FII selling created panic in the forex market as well,” said a dealer.