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Sensex crashes 128 points, goes below 3500

Pivotals across-the-board on the Bombay Stock Exchange today crashed sharply due to heavy sell-off of bluechip company stocks by foreign institutional investors (FIIs) and bear operators, leading the Sensex to fall by about 128 points to close below the psychological barrier of 3500.

The BSE-30 weighted index ended at 3417.89 points. The Sensex has shed 224.79 points during the last five consecutive sessions inlcluding a post-Budget session this week.

Speaking to UNI, BSE vice-president Rajendra Banthia, attributed the major fall on the BSE to the continous offloading by foreign funds in the index-based scrips. He said the future trend of the market is entirely dependent on the FIIs actions.

According to market sources, today's sell-off was led by foreign funds like Jardine Fleming and Morgan Stanley. The sources further said that international rating agency Moody's investor services indication that it would review India's country ceiling for foreign currency debt and bank deposits for a possible downgrade had a role in the Sensex's plunge.

Another rating agency Standard and Poor's also warned yesterday that if the fiscal deficit, targetted at 5.6 per cent of the GDP, does not come down, a downgrade is likely. S&P has expressed disappointment over the lack of steps in the budget to address the problem of fiscal deficit.

Vasudeo Joshi, assistant director, Jardine Fleming, said that the ongoing bearish phase is a technical correction and indicated that the same trend may continue next week. However, Joshi declined to comment on the continous selling pressure by the foreign funds in the Indian markets, mainly after the announcement of the Union Budget.

Reflecting the weak trend, the BSE Sensex opened at 3527.67, touched the day's high of 3536.00 and closed the day's low of 3417.89 points against the previous close of 3546.21 points.

The BSE-100 index fell by 63.26 points to 1513.94 points against the previous close of 1577.20 points.

Similarly, the BSE-200 and Dollex indices also closed lower by 15.64 and 6.23 points to 344.78 and 137.33 points against the previous close of 360.42 and 143.56 points respectively.

According to leading BSE brokers said, Unit Trust of India made small purchases at the prime counters throughout the day.

Today being the last day of current settlement cycle on BSE, market operators were busy squaring up their positions.

Cement major ACC lost sharply by Rs 61.50 to Rs 1517.50, Bajaj Auto drifted lower by Rs 31.50 to Rs 545.50, Hind Lever crashed by Rs 35 to Rs 1540, L&T by Rs 12.90 to Rs 245.60, M&M down by Rs 1.40 to Rs 208.30, Reliance dropped by Rs 6.10 to Rs 157, State Bank down by Rs 11.30 to Rs 198.20, Tisco slipped by Rs 9.70 to Rs 147.80, and Telco ended lower by Rs 6.50 to Rs 208.50.

The screen-based trading system on the BSE diplayed a total turnover of Rs 16.5 billion.

ITC registered highest business volume of Rs 2.75 billion, followed by Satyam Comp (Rs 2 billion), Reliance (Rs 1.4 billion), State Bank (Rs 1.2 billion) and BPL (Rs 1 billion),

Hectic activity was also observed at the other counters led by Tisco (Rs 539.2 million), Videocon Int (Rs 523.4 million), Pentafour S (Rs 483.7 million), Zee Telefilm (Rs 466.7 million), ACC (Rs 386.7 million), Tata Tea (Rs 381.1 million), Hind Lever (Rs 369.6 million), L&T (Rs 299 million), Castrol (Rs 297.9 million) and Sterlite (Rs 252.5 million).

UNI