Weak Yen Pulls Down Pivotals
Trading sentiment at the bourses dampened further yesterday mainly on account of the weakening Japanese currency and the plunge in neighbouring markets. Most pivotals took a beating yesterday with blue chips like Reliance Industries, Tisco, Telco, ACC and Bajaj Auto witnessing severe selling pressure.
Reflecting the weak trend, the 30-share BSE index opened at 3056.22, dipped to the day's low of 3017.33, before closing at 3020.71 points, a drop of 41.54 points or 1.35 per cent from its previous close of 3062.25. The BSE-100 index dropped by 13.80 points to 1351.05 against its Friday close of 1364.85. The S&P CNX Nifty closed 16.80 points lower at 878.75 against its previous close of 895.55.
The turnover at the bourses dropped sharply yesterday at both the exchanges in the absence of institutional support. The BSE clocked a turnover of Rs 727 crore _ well below the average traded turnover at the exchange. The NSErecorded a turnover of Rs 996.86 crore.
Market sources indicated that the political uncertainty created fear among the market players. However, there were indications that the market will find support at around 2850 levels. "Once the market hits the bottom of 2850, there should be good amount of buying," said a source at a leading domestic brokerage house.
Meanwhile, a leading Singapore-based fund, which manages two funds worth Rs 800 crore, has sold a chunk of its holding. It is reported that this fund sold close to 80,000 shares of Hindustan Lever on Friday. This stock went in for a tailspin yesterday as result of this.
Stocks in software, pharma and FMCG sectors witnessed hectic trading yesterday. However, some stocks in software sector remained extremely volatile. For instance, Pentafour Software touched both the upper and lower end of the price band during intra-day trade.
Among other software stocks, Ace Software saw hectic trading and it hit the upper end of the price band at both the exchanges. The stock has moved up in anticipation of excellent first quarter results. Parke Davis also witnessed a flurry of activity. The Reliance Industries (RIL) stock came under selling pressure and it dipped to Rs 126 at the BSE during intra-day trading. Some foreign fund is reported to have off-loaded a chunk of its holding at this counter which resulted in the stock dipping to an all-time low at the bourses.
There was good amount of selling at Hindustan Lever counter which pushed down the stock price. Apart from this, Zee Tele witnessed a trade in 7.34 lakh shares worth Rs 45.03 crore at the BSE.
Among the other major foreign fund selling recorded yesterday and the past coupled of days was that of MTNL. A US-based fund is reported to have sold nine lakh shares during the past couple of trading sessions. Yesterday, the fund is reported to have sold close to 2 lakh shares of MTNL.
Meanwhile, some of the domestic funds have reported to have made purchases at the FMCG counter. According to sources, the market dipped yesterday mainly because of the crashing GDRs. "With GDRs falling, punters decided to off-load their position. The market is expected to recover today as it is the last day of the settlement," commented a dealer.