The Indian stock markets crashed today as the new 12 per cent price band came into effect. Last week, the market regulator, the Securities and Exchange Board of India, had eased the ciruit breaker limit from 8 per cent to 12 per cent.

Bulls went on a rampage -- not as buyers though. There was massive liquidation from their side in Infotech, Communications and Entertainment (or ICE) stocks. This pulled down the Bombay Stock Exchange's 30-share Sensex, India's premier stockmarket barometer. The index crashed by 288 points or 6.18 per cent. A meltdown of the technology stocks was discerned today.

ICE heavyweights Wipro, Zee Telefilms, Square D Software, Silverline, Shyam Telecom, Satyam Computer, Rolta, Ranbaxy, Pentafour Software, Leading Edge, VSNL, Himachal Futuristic Communications, HCL, Global Telesystems, Dr Reddy's, Cipla registered maximum 12 per cent losses.

Marketmen blamed the so-called infotech Big Bull for bringing down the market by resorting to selling pressure in the infotech and telecom counters. The Big Bull is currently unwinding his position in infotech stocks, which resulted in a major drop in the benchmark index, said a veteran stockbroker.

Other brokers also cited a newspaper report which said a Ministry of Finance probe is likely into questionable deals of 30 infotech companies. The 'news' was today denied by Finance Minister Yashwant Sinha.

The Sensex heavyweights Hindustan Lever and Infosys Technologies too moved down considerably but dropped lower than the new price-bands. Infosys went down by 2.5 per cent while Hindustan Lever posted nine per cent decline on panic selling, notwithstanding the improved trading sentiments on the leading international bourses including NASDAQ.

The trend was very much similar at the National Stock Exchange or NSE where the S&P CNX Nifty index crashed by over 71 points or 5.05 per cent during the day.

Reflecting the weak trend, the 30-share BSE Sensex opened on a firm note at 4736.02 points, up by 76 points from the previous close of 4660 points. It touched the day's high of 4737.68 points, then fell sharply. The intra-day fall of 393 points was marked by the day's low of 4344.51, before closing at 4372.22 points, showing a net loss of 288 points or 6.13 per cent.

According to sources at the BSE, this is the first time in last five months that the Sensex has gone down below 4,400 level and closed at the 4375 level. It was in the November 1999 that the Sensex hovered at the 4270 level.

Meanwhile, the broad-based BSE-100 index nosedived by 163.84 points at 2232.38 points as against the previous close of 2396.22 points.

Market analysts were surprised by today's fall, since they were expecting a smart recovery in the market, in line with the world markets. The stockmarkets in the US and Japan reported improved performance in the last two days and American Depository Receipts of Infosys and Satyam Infoway registered considerable rise last week.

According to analysts, Infosys shot up by 27 per cent in the last six trading sessions while Satyam Infoway closed at $ 43, up by $ 4 from the previous close.

The positive happening in the world markets, however, failed to bring cheer to the local markets due to sustained selling pressure from speculators .

There was no follow up buying support came from foreign institutional investors as well as domestic institutional investors when the market was going down during the day, said Raman Parikh, one of the veteran stockbrokers of the BSE.

Srikant Chauhan, retail dealer at the Motilal Oswal Securities Limited pointed out that there were only a few stocks which could either hold on or reported gains and named Telco, Procter and Gamble and Siemens for reporting gains in the falling market.

UNI

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