After good Monday, it was black Tuesday for Dalal Street. Stock markets plunged on Tuesday on hectic selling by foreign funds and local operators in a highly volatile market.The 30-share Bombay Stock Exchange (BSE) Sensex shed 141.99 points, or 2.3 per cent, to settle at 5,922.11. In a highly volatile session, Sensex moved in a huge band of 230.38 points — between a high of 6,130.09 and low of 5,899.71 — even as foreign funds booked profits across the board.According to brokers, selling intensified towards the close of trade and at one point the Sensex was down by 164.39 points. On Monday, Sensex had surged 117.91 points to 6,064.10. The slowdown in purchases by FIIs (foreign institutional investors) has dogged the market of late. FIIs had pumped in $ 7.5 billion in the year 2003, the maximum by FIIs in a year. But, during the last five trading sessions, FIIs have been net sellers on three occasions. While FIIs put Rs 27.50 crore on Monday, they pulled out Rs 144.40 crore in the preceding two sessions. FII inflows so far this month aggregated Rs 2,004.10 crore. “The inflows seem to be slowing down. when one considers that FIIs had invested Rs 6,161 crore in December 2003,” said a broker.Besides, the huge outstanding positions in the derivative segment are another cause for worry. Open interest in the futures & options (F&O) segment of the NSE is estimated at between Rs 12,000-Rs 13,000 crore. If things get bad from here on, these positions would come up for liquidation too.The squaring up of positions by day traders added to the market’s fall. Day traders, who had gone long on the market on Tuesday, squared up positions following the decline. Margins calls (shares bought with borrowed money) were also triggered following the sharp sell-off. Margin calls are triggered when stocks fall below a certain specified level.Almost all pivotals received a setback in the selling avalanche. Major losers included Tata Power (down 6% to Rs 383.75), State Bank of India (down 5.6% to Rs 622.60), Tata Motors (down 4.5% to Rs 486.10), Tisco (down 4.1% to RS 438), Satyam Computer (down 4% to Rs 319.15), Bhel (down 3.8% to Rs 546), Zee Telefilms (down 3.7% to Rs 158), L&T (down 3.3% to Rs 518.75), Gujarat Ambuja Cements (down 3.2% to Rs 298.35), and HDFC (down 3% to Rs 651).Maruti Udyog (down 4.4% to Rs 403.65), Mahindra & Mahidra (down 3.9% to Rs 396.55), and Tata Chemicals (down 10% to Rs 142.70) were the other losers. PSU banks also tumbled. Syndicate Bank plunged 7.5% to Rs 39, Punjab National Bank (PNB) shed 7% to Rs 261.20, Oriental Bank of Commerce shed 7% to Rs 254.90, Canara Bank lost 6.7% to Rs 148.85, while Bank of India shed 5.6% to Rs 68.95. Meanwhile, a number of companies are slated to tap the IPO market shortly. According to market estimates, equity issues worth Rs 60,000 crore are in the pipeline. This includes IPOs from software major, Patni Computer Services and Petronet LNG among others.
