Sensex falls again, IT stocks battered again

Sensex (30-share BSE sensitive index) ended 1.20 per cent or 61.38 points lower at 5,041.08 against its previous close of 5102.46, recovering from its lowest in 2000 at 4,891.40 touched during the session. The BSE-100 index also dropped sharply by 95.75 points to 2975.77 from the previous close of 3071.52.

Brokers said cyclical shares like Reliance Industries, Hindalco and State Bank of India notched up gains defying the market gravity. Reliance ended eight per cent higher at Rs 291.25, Hindalco 3.25 per cent at Rs 738.25 and SBI 2.3 per cent higher at Rs 200. The board of Reliance Industries later recommended an interim dividend of 40 per cent for the current year.

Speculators and financial institutions were constant sellers and reportedly trimmed their holdings in several economy stocks and high-priced software counters in view of approaching end of the current fiscal. Of the 87 losers in specified list, seven scrips were locked in the lower circuit filter while Reliance and Bank of India hit the upper price band.

HFCL was the most active scrip with a turnover of Rs 473.72 crore of the total volume of business of Rs 3064.86 crore. HFCL dropped by Rs 79 to Rs 1840, Satyam Computer by Rs 336.25 to Rs 4813.75, Zee Tele by Rs 24.45 to Rs 1029.05, DSQ Software by Rs 34.95 to Rs 1760 and Infosys by Rs 667.10 to Rs 9676 on selling pressure.

ASIAN MARKETS FALL:Other Asian markets also fell on Thursday following the crash on Nasdaq on Wednesday. Nasdaq Composite Index crashed by 189 points following heavy selling internet and IT companies. Tokyo’s benchmark Nikkei stock average closed lower for the first time in five sessions, as investors turned nervous after its recent rapid advance and moved to lock in profits. Tokyo’s Nikkei average of 225 leading shares closed down 265.15 points or 1.28 per cent at 20,441.50.

Hong Kong’s Hang Seng index suffered its fifth-biggest point drop in the past two years as investors piled out of technology and telecom stocks after warnings by top market gurus prompted a sharp fall on the technology-driven Nasdaq. The Hang Seng index fell 3.48 per cent to 17,458.62 following a three-day slump on the Nasdaq.

The global sell-off in tech stocks came after emerging markets guru Mark Mobius of the Templeton Fund warned on Wednesday that a recent bout of volatility in Internet stock prices could herald the onset of a global crash in this high-flying sector. "I think we’re nearing the time, that’s my guess. And it will be big…. Some stocks will be 90 per cent or 50 per cent down," Mobius, who heads US-based Templeton Emerging Markets Group, had said.

The chief strategist’s warning came one day after Goldman Sachs and Co’s Abby Joseph Cohen shook markets by lowering the equity weight in the firm’s portfolio to 65 per cent from 70 per cent out of concern for lofty stocks valuation.

Meanwhile, Unit Trust of India (UTI), the country’s biggest mutual fund, said on Thursday it expected the Bombay Stock Exchange index to touch the 5,900 level in three months. "It will go again to 5,900 level in three months," UTI Executive Director Basudeb Sen told reporters in reply to a question on where he saw the Bombay Stock Exchange benchmark index of 30 top shares in the coming months.

He was speaking to reporters on the sidelines of a business seminar. "UTI is bullish. People who have been selling will at some time start buying once the prices have reached a sufficiently low level," he added.