Bears obstruct bull run for fourth straight session

Bears are tightening their grip on the markets. The Sensex fell 1.8 per cent on Tuesday with banking and technology stocks such as ICICI Bank and Infosys Technologies...

Bears are tightening their grip on the markets. The Sensex fell 1.8 per cent on Tuesday with banking and technology stocks such as ICICI Bank and Infosys Technologies hit by worries about the subprime crisis.

Taking its losses to 3.3 per cent over four days, the benchmark BSE Sensex ended down 352.56 points at 19,280.80, its lowest close in a week. The index, which is up almost 40 per cent this year, is 4.7 per cent below a record high of 20,238.16 hit on October 30.

Indian banks are not directly exposed to the US subprime losses but negative global sentiment on financial stocks has weighed, and outsourcers came under pressure from concerns a slowdown in the US economy and a strong rupee would hit demand. ICICI Bank slid 1.7 per cent to Rs 1,167.25, its lowest close since Nov 12, taking its losses to 8.7 per cent over the last four days.

ICICI8217;s American depositary shares had fallen 5.5 per cent as it was caught up in a sell-off of financial stocks after Goldman Sachs downgraded its rating on Citigroup. HDFC fell 2 per cent to Rs 2,638.50, and the banking sector index dropped 1.2 per cent. 8220;The market is likely to remain volatile for the next few sessions as it is taking cues from global markets in absence of any fresh triggers for it to go up,8221; said a dealer, adding, 8220;We are seeing some selling by the foreign investors lately, but if the rupee continues to be strengthen against the dollar, we may see more inflows that could take the market to a new high.8221;

Foreign investors have bought more than 17 billion of shares so far this year, well above the full-year record of 10.7 billion in 2005, although they have been net sellers of almost 130 million of shares so far in November.

Software services exporters were hit on concerns about the impact on earnings of a slowdown in the US, where they earn most of their revenues, and the strength of the rupee. Infosys Technologies fell 3.4 per cent to Rs 1, 564.40, its lowest close in more than 16 months, and sector leader TCS was down 2.8 per cent to Rs 960.55. The 50-share NSE index fell 2.15 per cent to 5,780.90.

Meanwhile, the rupee stayed under pressure due to weakness in Asian equity markets and on Tuesday ended marginally lower at 39.36/37 against the greenback amid weak dollar overseas and a slowdown in capital inflows. The local currency moved in a range of 39.33 and 39.45 during the day after resuming weak at 39.42/44 per dollar from previous close of 39.34/35 per dollar. The rupee was largely influenced by volatile movements in local equity markets, forex dealers said. Forex dealers attributed the currency8217;s bounce from initial lows to a stocks rally before the midsession.

STOCKS THAT MOVED

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8226;Shares in drug maker Strides Arcolab rose 9.6 to Rs 290.90 after it said it had formed a strategic partnership for its Latin American operations with South Africa8217;s Aspen.

8226;Dena Bank touched a life high of Rs 94.50 before ending down 1.8 at Rs 86.40.

8226;Metal stocks Sterlite Industries India fell 5.2 and Hindustan Zinc dropped 2.2, after copper and zinc futures fell by their daily limits in Shanghai.

TOP 3 BY VOLUME

8226;Tata Teleservices Maharashtra Ltd on 4.24 crore shares

8226;Himachal Futuristic Communications Ltd on 2.85 crore shares

8226;IFCI Ltd on 2.35 crore shares.