Narasimha Raos Arrest Warrant Sends Sensex Reeling

The Bombay Stock Exchange Sensex yesterday fell below the 3100-mark during intra-day trade and the index lost 94.50 points over its Thursdays close of 3195.77.

According to marketmen bears (both local and foreign) had a field-day during trading session. The markets opened on a promising note but the news of former prime minister P V Narasimha Rao being issued a non-bailable arrest warrant by the Delhi Metropolitan court sent pivotals crashing. The panic selling was also aided by the fact that major FIIs turned sellers. Some stocks which saw bear hammering included Bajaj Auto, Bombay Dyeing, Colgate, East India Hotels, Grasim, Hindalco, MTNL, SBI and Telco.

 

Marketmen said the GDR pricing of the SBI scrip also triggered off FII selling as the buffer support lent by some other FIIs (close to the bank) was absent.

According to a fund manager with a leading AMC, the stockmarkets could lose another 100 points before any recovery takes place.

Among the prominent stocks, Grasim Industries, Bombay Dyeing and L&T touched their 52-week lows.

An FII dealer said the market conditions are lacklustre due to absence of confidence in the Indian system among the foreign investors who have been off-loading pivotal stocks.

It is not that corporates are doing badly, but the political uncertainty has been the cause of worry, he added.

The Sensex closed at 3101.27, losing 94.50 points over the previous close of 3195.77. During intra-day trade, it opened at 3198.20, touched a high of 3208.74, before sliding down to low of 3095.14.

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