Border tension pulls down Re, stocks

MUMBAI, JUNE 1: The heavy shelling in the Indo-Pak border sent the share prices and foreign exchange market into a tailspin once again on...

MUMBAI, JUNE 1: The heavy shelling in the Indo-Pak border sent the share prices and foreign exchange market into a tailspin once again on Tuesday. While the Bombay Stock Exchange Sensitive Index fell by 51 points, the rupee fell by 10 paise to 42.94 against the dollar at the inter-bank foreign exchange market.

Pivotals turned weak after the mid-session on the BSE due to profit-taking at the higher level triggered by rumours of heavy shelling in the border areas of India and Pakistan. The selling pressure was also due to end account considerations on the National Stock Exchange NSE. Sensex had rallied by 190 points on Monday.

Sensex BSE sensitive index dropped from the day8217;s high of 3991.80 to finish at 3912.00 with a net loss of 51.56 points or 1.30 per cent against yesterday8217;s close of 3963.56. The BSE-100 index fell back by 23.10 points to 1690.92 from previous close of 1714.02. The Samp;P CNX Nifty Index of the National Stock Exchange opened at 1125.55 moved up to a high of 1139.80 and closed at1123.80, showing a net fall of 8.50 from the previous close of 1132.30.

Operators said that besides profit-taking the sentiment was also affected due to last day of the current settlement on the NSE which led to squaring up business in the form of bull liquidation in a number of scrips and short-coverings in few other shares. Both foreign institutional investors FIIs and Indian financial institutions FIs kept to the sidelines affecting the volume of business. 8220;The continuing tension in Indo-Pak border is causing concern,8221; said a dealer.

Pharmaceutical and software scrips suffered a setback due to fresh offerings induced by reports that a leading foreign fund had pressed sales in these sectors yesterday. Out of 148 traded specified shares, 31 advanced while 111 declined and six remained steady.

However, only five among the 30 index-based scrips closed in the positive territory. SBI clocked the highest turnover of Rs 237.47 crore of the total volume of business of Rs 1567.37 crore. But SBI eased byRs 2.60 to Rs 240.90 on selling pressure. Satyam Computer lost by Rs 48.50 at Rs 1370, ITC by Rs 34 at Rs 1026, Telco by Rs 7.55 at Rs 177.10 and Tisco by Rs 2.10 at Rs 107.50. However, Ranbaxy rose by Rs 11.40 to Rs 640.40 and Hindustan Lever by Rs 4.20 to Rs 2300 on short covering.

On the other hand, the Indian rupee reacted sharply and lost by about 10 paise against US greenback on corporate dollar demand coupled with border-tension at the interbank foreign exchange market today. The currency opened at 42.83/84 and gradually declined on increased demand from corporates.

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SBI8217;s dollar purchases on behalf of I O C coupled with corporate import covering pushed the rupee down to 42.97 per dollar during the course of day.

However, the rupee closed at 42.94/95 per dollar towards the fag end of trading, showing a net loss of 10 paise from the previous day8217;s close of 42.84/85 per dollar. Dealers attributed the rupee8217;s fresh fall to the three major factors heavy demand on account of IOC8217;s import covering,yesterday8217;s memorial holiday in the US and UK markets and fresh air-strikes and reported entrance of two Pakistani planes in Indian territory mainly forced the rupee to touch the downside.

No basis for markets to panic: FM

NEW DELHI: Finance Minister Yashwant Sinha today said there was no basis for the capital market to panic in the wake of Kargil situation. Sinha who was speaking to reporters on the sidelines of a seminar organised by FICCI said he could not do anything if the stock markets react in such a selective way.

When asked whether any decision by the cabinet committee on security could have affected the bourses in the country, he said it was not true.