Jaya’s ultimatum rocks markets, Sensex crashes by 167 points

The S&P CNX Nifty index of the National Stock Exchange lost 52.05 points at 1011.40. Similarly, the Delhi Stock Exchange dropped by 41.47 points and the Calcutta Stock Exchange’s 40-Share index slumped by a massive 87.19 points from its April 1 close. The markets were virtually swamped by sellers who offloaded shares with alacrity.

“Jayalalitha has made the markets nervous,” said a dealer, adding that the the market was not comforted by the government’s confidence about its survival. “Till its strength is actually proved, it will be better to wait and watch. The game is unpredictable, no one wants to enlarge positions now,” he said.

Foreign institutional investors were mostly out of the market and local institutions did not provide much support, dealers said. Out of 149 specified shares, 136 scrips including all the 30 Sensex scrips showed sharp to moderate falls. “Monday’s sell-off was across the board. The unwinding was pronounced as long positions were built up after the Union budget was presented on February 27,” said a leading broker.

On the BSE, Sensex opened sharply down at 3625.21 and slumped further as the session progressed to the day’s low of 3499.83 before closing at 3519.39 with a sizeable loss of 166.90 points compared to the last Thursday’s close of 3686.29. The BSE-100 index lost 74.10 points to 1559.77 from the previous level of 1633.87. This is the biggest fall in Sensex after October 5, 1998, when it dipped by 224.22 points.

The new account started on a bearish note following the political developments and marketmen resorted to heavy liquidation on fears of fall of the BJP-led government at the centre. With the government also toughening its stand against AIADMK, operators fear that the AIADMK might withdraw support to the BJP-led government within a couple of days. Besides bull operators, institutional investors too unloaded heavily in heavy-weight scrips like SBI, Reliance, Telco and Tisco.

Brokers said the market was not comforted by the government’s confidence about its survival. Dealers said they expected the market to remain nervous till the political situation became clearer. Operators discounted the positive news like the bold Exim policy and even expectations of fresh reforms in forthcoming credit policy after the encouraging budget.

Fund managers said the market could stabilise only after the emergence of an encouraging political scenario as the fall of the present government would jeopardise the finance bill and a host of important bills like the Insurance Bill.

In the specified group, 15 scrips including BPL, BHEL, Satyam Computer, Pfizer, Pentafour, Telco, E Merck, SBI and Siemens hit the lower circuit filter after exhausting the daily price limits. Over 110 scrips in B1 and B2 groups also hit the lower price band.

Satyam Computer was the top traded scrip with a turnover of Rs 245.00 crore among the total volume of business of Rs 1559.62 crore and the scrip dropped by Rs 135.75 to Rs 1564.25 on heavy unloding. Pentafour Software also dipped by Rs 100 to Rs 1151, ITC by Rs 61 to Rs 883.75, SBI by Rs 16.40 to Rs 189.60, Reliance by Rs 9.80 to Rs 121.80, Hindustan Lever by Rs 45.25 to Rs 2174.75, Telco by Rs 13.30 to Rs 153.30 and Tisco by Rs 5.90 to Rs 94.90 on selling pressure.