The market touched a 16-month low yesterday after a general selloff across all stocks. The ICE (information, communication and entertainment) sector was the worst hit with many stocks closing near their lower circuit limits. The Nasdaq continued its poor run and fell to a 4-month low. This hurt sentiment and Asian markets opened weaker. The Nikkei and Hang Seng were substantially down and this affected the local sentiment. The market gave way due to tired bull liquidation, bear hammering and fund selling. While no single reason can be attributed to the latest crash, it is more a convergence of reasons all coming in at the same time. There seems to be no light at the end of the tunnel and players are anxious as to know what lies ahead. A feeling of despondency is looming large over the street.
Worst hit
Satyam Computers was the worst hit in yesterday's carnage with the stock losing more than 14 per cent. Although the quarterly results reported by the company showed a fairly decent growth on the face of it, the numbers seem to have already been discounted. Also some analysts claim that the quality of earnings look suspect and that the increase in the bottomline numbers is not in the manner it was expected to be. To complete its cup of woes there were rumours doing the rounds that the company may be forced to defer its ADR issue since the scenario worldwide is not conducive for such an exercise. Prudent fund was one of the first to hit the sell button and dumped about 3 lakh shares. In all, about 12 lakh shares are supposed to have been sold through different broking houses for different clients. In the previous session Jordan Flaming, Universal Banking and the Big Bull outfit sold about three and a half lakh shares between them for their offshore clients.
Bearing the brunt
Infosys also bore the brunt of selling pressure , and a poor showing on the Nasdaq after the announcement of its results was another reason for it to get hit. The stock closed almost 7 per cent lower after it made a brave attempt to hold its own. Here again though the results were much better than any analyst could expect but the sell off seems to be due to sudden nervousness on the valuation front. As in any bear market the fears usually get overplayed and hyped up and this time too it is no different. The sharp fall in Infosys seems to be more a factor of over ownership and proper distribution with the result that there are not many fresh buyers. Even a small or moderate amount of selling is sufficient to send the counter crashing in the prevailing bearish environment. Jordan Flaming fund sold about 20,000 shares and Numero Uno was a small seller to the extent of 10,000 shares. However domestic institutions are reported to be buyers in the stock but the quantum could not be confirmed.
In good spirits
Pharmaceutical stocks managed to reflect some semblance of respectability on the bourses with Dr Reddy's , Ranbaxy, Cipla and Sun Pharmaceuticals holding relatively stable. This looked even more spectacular when viewed against the backdrop of an extremely weak market. In the previous session Y Car picked up about 1.5 lakhs of Ranbaxy, while Dutch brokerage picked up about 70,000 shares of Dr Reddy and 50,000 shares of Glaxo. Big Bull brokerage also picked up about 70,000 shares of Cipla for its client. Universal Banking chipped in by buying another 40,000 shares of Dr Reddy.
Something's cooking
MTNL seems to be undergoing a shift in its perception and a few funds are having a new look at the stock. Co-Tech Securities picked up about 25 lakh shares in the previous trading session. The Cross Bee brokerage picked up about two and a half million shares on behalf of a foreign client in the past couple of days. However King Kong had a different view and sold about 12 lakh shares.
