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Sensex touches 20-month low

Equity prices tumbled and the Sensex fell sharply by 204.31 points, touching a 20-months low of 3143.10 points, on the Bombay Stock Exchange during the week ending June 19.

Many reasons were attributed for the fall: Economic sanctions imposed by the US, decline in global depository receipt scrips, turmoil in the Asian markets, downtrend of the Indian rupee in the forex market, ban on short sales by the Securities and Exchange Board of India and a massive selling spree by foreign institutional investors.

The week in review witnessed an upheaval in trading trends. Though it registered an increase of 240 points on Wednesday -- the second highest in the BSE's recent history -- the Sensex plunged the very next day.

During the Big Bull run in 1992, the Sensex gained about 400 points in a single day trading -- a record.

The BSE Sensitive Index dropped below the psychological barriers of 3300 and 3200 and closed at 3143.10 points, suffering a loss of 204.31 points as against the previous week's close of 3347.41 points.

On Monday, equities crashed heavily on hectic selling pressure from the FIIs and continuous turmoil in the Asian markets. However, share prices recovered marginally on Tuesday on hectic buying by domestic institutions like the Unit Trust of India and the Life Insurance Corporation of India.

On Tuesday, the SEBI imposed a ban on short sale in the stock exchanges.

During the week, the SEBI imposed an additional 10 per cent margin on incremental carry forward position.

Market sources said that investors are confused over the present situation in the capital market because of the instability of the Indian rupee.

The payment difficulties, particularly at the BPL and Videocon counters, also created confusion among the bear operators.

The sanctions imposed by the US on India have demoralised FII sentiment.

Share prices at National Stock Exchange also crashed sharply.

The NSE-50 index crashed by 57.90 points to 913.25 points as against the previous week's close of 971.15 points.

The Midcap index eased to 1260.60 points as compared to previous week's close of 1352.00 points losing 91.40 points. The total turnover on the exchange was Rs 51.77 billion.

UNI