Sensex slips below 17,000 as FIIs go on selling spree

Heavy selling by foreign institutional investors (FIIs) saw the Bombay Stock Exchange (BSE) Sensex close below 17,000 for the first time in over a month.

The outlook was still not upbeat, as major funds bet on the dollar as a safe haven against other asset classes. Global crude oil also fell and the NYMEX crude futures index for June delivery was trading between $78 and $79 a barrel, its lowest since late February.

The Sensex fell 100 points, or 0.6 per cent, to close at 16,987. It was highly volatile, touching a low of 16,823 and a high of 17,080. Provisional figures showed FIIs were net sellers in the cash segment by Rs 937 crore. Domestic institutions bought stocks worth Rs 379 crore.

The broader index, the S&P CNX Nifty of the National Stock Exchange (NSE), was down 34 points, or 0.66 per cent, and closed at 5,090. The Nifty on Thursday saw some buying from domestic players at lower levels, as European markets staged a recovery.

Market players were keenly awaiting the Supreme Court judgement on the gas dispute between the Ambani brothers which would be announced on Friday. “The gas dispute has been going on for nearly five years. The markets will get clarity if the judgement is specific,” said Kishor Oswal, director of CNI Research. On Friday, share prices of Reliance Industries (RIL) and Reliance Natural Resources (RNRL) would be keenly watched.

The RIL stock fell 0.96 per cent to close at Rs 1,010, while RNRL was down 0.2 per cent at Rs 68.3 on BSE.

Telecom stocks slid as bids for one set of nationwide third-generation mobile spectrum licences reached $2.46 billion on Wednesday, leading to concerns the huge cost could dent the winning companies’ earnings.

Top mobile operator Bharti Airtel closed 1.8 per cent lower while rival Reliance Communications shed 1.9 per cent.

Private-sector lenders ICICI Bank and HDFC Bank dropped 0.1 per cent and 0.8 per cent respectively, while Housing Development Finance Corp shed 1.6 per cent.

Top lender State Bank of India bucked the trend and closed 1.1 per cent higher.

The market breadth showed that nearly 50 per cent, or 1,467 stocks, fell, and 46.3 per cent or 1,360 scrips, rose.

Hindustan Unilever was the top gainer on Thursday, up 1.55 per cent at Rs 232. Tata Motors was the top loser, down 2.5 per cent at Rs 814.

The BSE Health Care index was up 1.4 per cent, followed by the BSE PSU index (up 0.64 per cent.).

Foreign funds have pumped a net of $6.6 billion into Indian stocks so far in 2010, but the benchmark is down 2.7 per cent in the period.

In 2009, the funds had invested a record $17.5 billion and helped the index jump 81 per cent.