Drought Fears Send Sensex To 10-Month Low

The Sensex today plunged to 10-month low, also the closing, as selling pressure continued amid concerns about delayed monsoon and accounting lapses in a leading industrial group.

The BSE's 30-stock index lost 59.39 points and settled at 2,950.09, its lowest close since October 11, 2001, while the NSE's S&P CNX Nifty shed 15.55 points to end at 953.55.

The breadth of the market was negative as losers outnumbered gainers by three-to-one in light trades.

Brokers said fears of weak monsoon rains revived after agriculture minister Ajit Singh said drought had hit all provinces except Assam, making it the worst in more than 15 years.

Dealers at a foreign brokerage said, "The drought appears to be a big factor prompting investors to sell at this stage."

Fast-moving consumer goods major Hindustan Lever Ltd slipped 1.41 per cent to Rs 167.40 on institutional selling, while ITC dipped 3.62 per cent to Rs 654.15. Other economy-related stocks also drooped on growth concerns.

Cement stocks such as Guajrat Ambuja Cements (down 2.10 per cent to Rs 165.85), ACC (down 1.85 per cent to Rs 135) and Grasim (down 0.44 per cent to Rs 308.50) ended lower.

However, the exception was Larsen & Toubro (up 0.21 per cent to Rs 163.75). The stock managed to end in the positive zone on selective buying, on reports that Unit Trust of India is planning to offload its 10.71 per cent stake in the company.

In the auto segment, two-wheelers major Hero Honda Motor (up 0.29 per cent to Rs 274.40) rose on reports that it would launch one of the two motorcycles, that it scheduled for this fiscal, in September 2002.

In Tata group stocks, Tata Finance (down 6.78 per cent to Rs 22.70) was hammered down on reports that the department of company affairs (DCA) would also be considering action against the company for alleged violation of the Companies Act. Other group stocks, too, detracted amid concerns about accounting problems.

Key technology stocks such as Satyam Computer (down 2.51 per cent to Rs 197.75), Infosys (down 0.90 per cent to Rs 3,092.15) and HCL Technologies (down 1.99 per cent to Rs 174.40) ended lower, after a steady opening, in the absence of buying interest.

In the media sector, Zee Telefilms (down 3.27 per cent to Rs 99) slipped below Rs 100 as selling pressure resumed on the counter.