UTI decision sends market into a tailspin

MUMBAI, JULY 3. A heavy sell-off by nervous operators and retail investors sent market indices into a tailspin on the Bombay Stock Exchange (BSE) today following Unit Trust of India's (UTI) decision to suspend sale and repurchase of the flagship scheme US-64 for the next six months.

Disclosing a whopping 113.74 points drop at the closing bell at 3312.29 against yesterday's close of 3426.03, the Sensex has lost over 144 points in two consecutive sessions since the introduction of compulsory rolling system with the UTI's overnight move taking the bulk of the losses, dealers said.

Bear onslaught was so high that 24 out of 30 index-based stocks recorded sharp to moderate losses, they added.

The UTI's announcement to freeze US-64 for the six months sent shivers down the spines of retail investors and badly affected the market sentiment, which was already in confused state due to the introduction of new rolling system.

As a result, wary operators pressed sell buttons in those shares that were top in the list of US-64, mainly heavily weighted counters such as Reliance, Infosys, BHEL, Grasim, L&T and Tisco, a dealer said.

However, other index-based shares such as Hindustan Lever, SBI, HPCL, BSES and NIIT bucked the general trend and registered sharp to moderate gains but were unable to stem the Sensex fall.

Meanwhile, the BSE-30 share sensitive index opened firm at 3452.11, which was also the day's high, and gradually moved downwards to touch an intra-day low of 3300.15. The BSE-100 index also dipped by 48.71 points to 1566.35 compared with previous close of 1615.06.

A continuous downslide in the value of rupee against the U.S. dollar which touched an all-time low of 47.20/21 in intraday deals, before rallying to close at 47.1250/1350, also weighed on the market.

The BSE-200 index and the Dollex were quoted sharply down at 344.80 and 121.75 from Monday's close of 354.82 and 125.50 respectively. The BSE-500 index also declined by 28.58 points to 1016.12 compared with 1044.70.

The total volume of business remained low at Rs. 811.13 crores but relatively high from yesterday's turnover of Rs. 505.43 crores. Reliance clocked the highest turnover of Rs. 113.69 crores followed by Infosys (Rs.100.74 crores), Wipro (Rs.72 crores), Satyam Computer (Rs. 70.99 crores) and Digital Equipment (Rs. 61.73 crores).

The market leader Reliance tumbled by Rs. 29.55 to Rs. 328.10, Infosys by Rs. 445.95 to Rs. 3,277.10, Wipro by Rs. 47.90 to Rs. 1,291.20 and Satyam Computer by Rs. 15.55 to Rs. 165.

- PTI

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