Sensex snaps four-day rally

STOCK REPORT

The stock market snapped a four-day strong rally and plunged by 95 points from the day's high to end at 10,595.43, as a consolidation after heavy profit sales by operators and retailers countered fresh purchases from institutional investors.

The market had risen by 426 points or 4.18 per cent in the past four pre-budget and post-budget sessions.

After initial rally to the day's high of 10,690.00, the Bombay Stock Exchange (BSE) Benchmark 30-share Index (Sensex) later met with resistance and dropped sharply in erratic trade and ended the day at 10,595.43 against yesterday's close of 10,626.78, a net fall of 31.35 points or 0.30 per cent.

Despite fairly good purchases by foreign institutional investors (FIIs) and local mutual funds, operators and retail investors adopted a cautious approach in view of the market's overextended gains and resorted to heavy profit booking in a number of counters, brokers said.

The intra-day fall was seen as a necessary correction for the good health of the overstretched market.

FIIs, which have been consistent buyers, reported inflows of Rs 576 crore in equity on March one after making hefty net investments of over Rs 7,600 crore during February.

Domestic funds made net purchases of Rs 481 crore in three sessions between February 27 and March one.

Key counters such as HDFC, Hero Honda, L&T, ICICI Bank, TCS Ltd and Infosys Technologies bore the brunt of selling and recorded sharp falls.

Tata Motors, Maruti Udyog, REL, Tata Power, Bharti Tele and BHEL showed sharp gains.

Meanwhile, Finance Minister P Chidambaram reassured that the government is committed to reforms and easing FDI regime, especially in insurance and banking, as it was crucial for economic development.