MUMBAI, Apr 26: The dissolution of the 12th Lok Sabha pulled down share prices on major stock exchanges today with the Sensitive Index (Sensex) of the Bombay Stock Exchange (BSE) nosediving by 161 points. Institutional investors and operators offloaded shares across the board amidst fears of possible setback to the revival of the economy in the wake of the dissolution.The market opened on a bearish note as speculation was rife about dissolution of the Lok Sabha in the morning itself. The 30-share benchmark index opened lower by over 100 points at 3296.23 points from the previous close of 3406.59 points and touched the day's high of 3322.89 points and a day's low of 3239.47 points, before closing at 3245.27 points, showing a massive decline of 161.32 points over the previous close. The broad-based BSE-100 fell sharply by 73.05 points to 1408.80 points as against previous close of 1481.85 points.The S&P CNX Nifty index at the National Stock Exchange also registered huge decline of 50.65 points at 931.35 as against the previous close of 982.00 points. Other exchanges Delhi, Calcutta and Chennai also reeled under heavy unloading. Barring some shares like Krone Communications, Mcdowell, Concor, HPCL and Colgate, almost all the counters witnessed heavy losses, analysts said. The market will go down heavily if elections would be delayed till September. ``There won't be any more investment by foreign institutional investors (FIIs) in the market till the new government takes over,'' said an official of a foreign investment firm.Pharmaceutical and softwares shares were particularly sold heavily for reducing positions. Despite the political uncertainty, select counters witnessed fund based purchases on the local bourses on Monday. While a section of the brokers was of the opinion that today's correction provided a new bottom for the index, the issue on whether the elections would be conducted before or after the monsoon continued to disturb the stock-broking community."Technically the index is poised to make a new bottom at 3,050 levels. The FIIs and institutional players have yet not started selling. However, if they turn net sellers on account of the political tensions we would face a considerable erosion in the index values," said BSE director Ramesh M Damani.The huge sell-off witnessed on the local bourses, according to market pundits, was purely a panic reaction to the confusion on the election date. "Monday was the last day of the trading cycle on the NSE on account of the holiday on Tuesday. This coupled with the political factors led to operator driven sell-off at the bourses," explained a veteran BSE broker in the light of the considerable fall in the net outstanding on the BSE.The dissolution of the Lok Sabha is expected to slow down foreign institutional investments, which in turn is expected to leave the markets hollow for sometime. FIIs, who had taken a positive view of the Indian markets on hopes of the Congress forming a government, are developing cold feet.Though there may not be any reversal in the investment trend, the kind of inflows witnessed ever since the fall of the BJP-government is not likely to continue, was how a senior official of a leading FII put it. ``For the FIIs, the sentiment will turn negative in the run-up to the elections,'' he adds. Top
