GMR withdrawal pulls markets down

After a sharp breakout on Friday, when the Bombay Stock Exchange's (BSE) Sensex rose over 400 points, trading was quite volatile and profit-booking was witnessed at higher levels in the first two trading sessions of the current week.

Volumes at the two exchanges were low. Today the exchanges clocked a trade volume of Rs 78,400 crore as compared to an average daily volume of Rs 97,000-98,000 crore in the rest of the month.

There were mixed signals from the US yesterday. The Dow added 90.99 points (1.08 per cent) to 8,529. The Nasdaq was flat at 1,844, up 6 points (0.3 per cent). The Sensex plunged 291.90 points, or 1.97 per cent, to 14,493.84. The CNX Nifty lost 99.85 points, or 2.27 per cent, to close at 4,291. ''One of the reasons for the markets to fall today is that after GMR Infrastructure withdrew the QIP issue, there were fears about other infrastructure companies' ability to raise funds," said Hitesh Agarwal, head (research), Angel Broking. The market breadth was quite negative. Out of 2,677 shares traded, 1,846 declined (68.96 per cent), 757 advanced (28.28 per cent) and 74 (2.76 per cent) were unchanged on the BSE today.

Reliance, Larsen & Toubro and ICICI Bank were the major counters that dragged down the index. They cumulatively accounted for nearly half the day's losses. While Reliance alone accounted for 63 points loss of the index, Larsen & Toubro and ICICI Bank shaved off 37 points and 33 points, respectively. All the sectoral indices ended in the red with the realty index plummeting 7.42 per cent after GMR Infrastructure decided to withdraw its $500-million fund raising plan.