Panic selling pulls Sensex down

MUMBAI, DEC 22: The Bombay Stock Exchange bellwether Sensex fell by 128 points on Friday as there was panic on the bourse on rumours of a ...

MUMBAI, DEC 22: The Bombay Stock Exchange bellwether Sensex fell by 128 points on Friday as there was panic on the bourse on rumours of a possible payment crisis that landed at the mid-session sending market indices into a tailspin. NSEacirc;euro;trade;s Nifty fell by 38 points.

Dealers said there was huge sell order for 8 lakh shares of Infosys Technologies. The factors which led to a sell-off, are: Huge outstanding positions in tech stocks, constraint on shift of positions on the last day of the settlement on BSE to NSE. There is only one trading day left on Tuesday on NSE as markets will remain closed on Monday on account of Christmas.

The Sensex opened firm at 4057.72 points as compared to previous close of 4034.23 on back of marginal recovery at Nasdaq and surged ahead to reach intra-day high of 4080.30 before the mid-session. It started its downward march after the rumour that Calcutta Stock Exchange CSE has faced some problems in carrying out pay in for the last settlement.

At final point, the bellwether Sensex concluded at 3905.90 as against yesterdayacirc;euro;trade;s close of 4034.23, a hefty loss of 128.33 points or 3.18 per cent. The index lost over 263 points in the last straight four trading sessions.

Looking at the current market behaviour, dealers said sustained rise in net outstanding positions, particularly in top ten traded new-economy stocks which represent more than 40 per cent of total outstandings upto Wednesday, was main cause of concern that forced speculators to offload their holdings even at lower price leading to steep erosion in share values.

Bear operators also took full advantage of the prevailing market situation by selling heavily, particularly in technology, media and telecomm sectors, and made a successful attempt to tighten their vice-grip. Bucking the bear carnage, index heavyweights HLL and HPCL were in limelight on investment buying and made a feeble attempt to stem the Sensex loss. Despite a steady trend on the Nasdaq, which showed a sign of relief last night after seven dayacirc;euro;trade;s of battering, software stocks remained weak on continued selling by foreign funds. Barring select FMCG scrips, most of the cyclicals also dropped heavily.

The market leader, Himachal dipped Rs 143.95 to Rs 1106.85. Infy was down Rs 480.70 at Rs 5796.40, Global Rs 133.95 at Rs 720.80, NIIT Rs 132.40 at Rs 1522.10, Dr Reddy Rs 45.55 at Rs 1285.45, SSI Rs 234.45 at Rs 1361.10, Wipro Rs 210.60 at Rs 2295.60 and Sterlite Rs 71.65 at Rs 824.10.