Heavy Selling By Fiis Leads To Sharp Fall In Pivotals

Speculatives suffered another sharp setback on the Bombay Stock Exchange (BSE) and broke the 3,247 and 3,220 support levels yesterday in the wake of heavy selling by foreign institutional investors (FIIs). FIIs, led by Morgan Stanley and Jardine Fleming were off-loading heavily in almost all the index based counters, particularly Castrol, ITC, Bajaj Auto, Bhel, Colgate, HDFC, L&T, MTNL, Telco, Tisco, Tata Tea and others.

The BSE Sensex after touching the intra-day high of 3,301.90, dropped sharply to close at 3,209.55 as against the last close of 3,276.21, a loss of 66.66 points. The BSE-100 index also dipped by 27.37 points to 1,401.65. Morgan Stanley sold sizeable shares reportedly on behalf of Peregrine India which was not operating on its card, in a bid to liquidate Peregrines holdings, brokers said, adding, the Hong Kong -based parent company of Peregrine India is off-loading its holdings all over the world and has decided to go in for liquidation on January 12 following a meltdown in Indonesian markets.

The selling pressure was so widespread that financial institutions kept watching only to make a feeble attempt at the last moment by picking small lots of shares of Tisco, SBI and Telco. Jardine Fleming sold about 15 lakh shares of ITC and one lakh of Castrol, a leading dealer said.

Yesterdays setback has resulted in beaking the two support levels and the stocks are likely to crash touching the 3,000-mark in the next few days, brokers felt. The rupee saw sharp erosion in its value against the dollar to close at 38.75/80. The ITC scrip remained the most active with a turnover of Rs 363.53 crore of the total volume of business of Rs 994.19 crore. Other active scrips were Castrol (Rs 164.06 crore), SBI-new (Rs 94.57 crore), Tata Tea (Rs 81.07 crore) and Reliance (Rs 52.01 crore).