Markets drop on profit-booking

Markets slumped in late-noon trades on a bout of profit taking to end near the day's low.

The Sensex had opened at 20,544 and touched a marginal high of 20,581. It traded near the dotted line for most part of the day but dropped sharply in late-noon trades as investors took to booking profits. The BSE benchmark touched a low of 20,273 and finally ended with a loss of 244 points at 20,300.

Nifty ended at 6,120 - down 66 points.

Investors worldwide showed concern ahead of the European Central Bank and Bank of England's policy meet. Though the popular opinion is that ECB rates will stay low, global markets have shown some worries. The DAX and FTSE has dropped marginally to 6,266 and 5,677, respectively.

Foreign Institutional Investors continue to invest in Indian markets. Net equity inflow in 2010 now stands at a record $20.52 billion, above last year's $17.45 billion, as per data from the Securities & Exchange Board of India (Sebi). Meanwhile, the International Monetary Fund (IMF) on Wednesday, 6 October 2010, raised its India growth forecast for 2010.

BSE sectoral indices were mostly in red. Realty index shed 3% at 3,894. Metal, capital goods and IT idnices dropped over 1% each. However, the healthcare index added 0.3% to 6,256.

Small and mid-cap indices reversed trends in mid-noon and dropped 1% and 0.8%, respectively. The indices had gained around 1% in the morning.

Analysts have been expecting a minor corrections in the emerging market bull markets like India. "We have to be ready for such short-term volatility. Emerging markets have rallied over the past year and investors might be tempted to take profits, which could lead to short-term market corrections," Mark Mobius, Emerging Markets guru said.