Markets on 145;high alert146;; fall continues

The free fall of markets is continuing. Despite the tough talk by Disinvestment Minister Arun Shourie, huge institutional buying and Sebi mo...

The free fall of markets is continuing. Despite the tough talk by Disinvestment Minister Arun Shourie, huge institutional buying and Sebi move to seek data on PSU deals, the benchmark sensex fell by another 51 points in volatile trading on Thursday.

Up as much as 105 points at one point, the 30-share BSE Sensitive Index Sensex eventually ended with a loss of 51.03 points, or 0.91, at 5,567.12. The NSE S 038; P CNX Nifty Index also shed 21 points to end at 1,765.80, off the day8217;s high of 1,818.60.

The Sensex had lost 116 points on Wednesday amid concerns about a squeeze in liquidity in the secondary market.

From a recent high of 6,082.80 touched on February 18, the Sensex has declined 515.68 points. From its all-time high of 6,249.60 touched on January 9, the benchmark index has lost 682.48 points. For the year 2004, the Sensex has lost 272 points so far.

The mood in the market appeared optimistic in early trades after investor confidence appeared returning following the encouraging pricing for the public offer of Gail India. The government on Wednesday said that it would probe into the poor response to the public issues of various PSU. The government also said that it had identified people responsible for pulling down stock prices and fixed the responsibility on financial advisors to motivate and inform the public.

8220;Some bookrunners and merchant bankers may have manipulated the market to reduce the offer price of the public offerings. This may be aimed at helping institutional investors to buy at lower prices,8221; said a dealer.

While the government has reportedly warned stock market operators, including merchant bankers, against manipulation of share prices, there were indications that certain public sector companies, FIs and banks would be asked to step in, not only to help the issues get fully subscribed, but to trap short sellers as well. 8220;Had FIs not intervened and bought shares, the market would have crashed by over 150 points again on Thursday,8221; said an NSE dealer.

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Foreign funds also remained sellers. On Tuesday, FIIs pulled out a net Rs 270.20 crore which was much higher than the outflow of Rs 168.10 crore on Monday February 23, 2004. With Tuesday8217;s outflow of Rs 270.20 crore, FIIs have pulled out a net Rs 438 crore in a mere two trading sessions. Two-wheeler major Bajaj Auto declined from a high of Rs 916.90 to a low of Rs 857.25 before settling at Rs 866.25, down 4.22 from its previous close, and 5.52 from its day8217;s high. Other automobile pivotals Hero Honda down 0.39 to Rs 496.15 and Tata Motors down 0.09 to Rs 496.55 slipped marginally.

Cipla down 4.12 to Rs 1,190.80 dropped from the day8217;s high of Rs 1,252.70. Other pharma pivotals Ranbaxy Labs down 2.71 to Rs 925.85 and Dr Reddy8217;s Labs down 0.83 to Rs 1,248.60 edged lower after early gains.

Telecom services provider Bharti Tele-Ventures down 3.36 to Rs 142.55 fell after trading in the red for most part of an otherwise volatile trading session. Heavyweights State Bank of India down 2.05 to Rs 575, Reliance Industries down 1.98 to Rs 543.35 and Hindustan Lever down 1.09 to Rs 172.60 contributed to the fall of the Sensex.