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Sensex drops by 79 points

The Sensex fell by another 79 points on the Bombay Stock Exchange today following heavy selling pressure from foreign institutional investors in the index related scrips.

Political developments in the capital on the issue of Jain Commission report and the falling value of Indian rupee in the forex markets affected the market sentiments on the Indian bourses, marketmen said.

Reflecting the bearish phase, the BSE Sensitive Index opened at 3601.30 points, touched the day's high of 3616.44, fell below the important mark of 3600 to touch the day's low of 3534.06 and later closed at 3554.10 points, showing a sharp loss of 79.08 points over the previous close of 3633.18 points. The Sensex already lost 90.22 points yesterday.

Similarly, the broadbased BSE-100 Index dropped by 34.11 points to 1539.12 points against the previous close of 1573.23 points.

The Unit Trust of India, the leading domestic institution, tried to support the falling market, but the selling pressure was so high and it failed to stabilise the market conditions through its lone act, leading BSE brokers said.

The rupee today declined by another five paise against the US dollar at Rs 36.74-75 per dollars.

In Hong Kong, the Hang Seng reported a further fall while the Nikkei at the Tokyo and Dow Jones at the New York stock exchanges also registered major losses.

Commenting on the downtrend on the Indian bourses and the FII selling, Vasudeo Joshi, vice president, fund management at the Jardine Fleming, a leading foreign institutional investor, said the political situation at the Centre, and concern over the present slowdown in Indian economy affected FII sentiment, resulting in heavy selling in Indian stocks. He also added that at present the FIIs operating in India are facing redemptions, another major factor for their selling.

Joshi said the Indian stock market may face a downtrend for another month or so. However, he was optimistic about the Indian markets in the long term.

BSE Director Rajendra Banthia said that the government should allow domestic institutional investors to invest in equities beyond the existing limit of five per cent which would help in certain crisis like situation.

ITC, TELCO, Hero Honda, Bajaj Auto, Reliance, TISCO, State Bank of India and Colgate declined sharply during the course of trading.

ITC fell sharply by Rs 15 to Rs 539, Bajaj Auto declined by Rs 13 to Rs 549, Hero Honda down by Rs 17 to Rs 944, TELCO drifted lower by Rs 5.25 to Rs 330.50, State Bank dropped by Rs 11 to Rs 243, Reliance by Rs 5 to Rs 163.50 TISCO by Rs 3.50 to Rs 154, Hindalco by Rs 4 to Rs 875, and Hind Lever fell sharply by Rs 13.75 to Rs 1289.

The total turnover on the BSE reported during the day was at Rs 6.8 billion.

ITC stood first in the list of turnover by registering highest turnover of Rs 2.1 billion, followed by SBI Rs 1.1 billion, Reliance Rs 817.7 million, Castrol Rs 391.8 million and Tata Rs 343.8 million.

Hectic activity was also observed at the other counters like TELCO Rs 184.7 million, MTNL Rs 170.8 million, Hind Lever Rs 128.7 million, TISCO Rs 123.1 million, L&T Rs 116 million, BHEL Rs 106.5 million, BSES Rs 72.1 million, Guj Amb Rs 61.8 million and ICICI Rs 60.6 million.

UNI