Panic on Dalal Street

By Our Special Correspondent

MUMBAI, MARCH 13. In highly volatile trading on the Bombay Stock Exchange today, the benchmark Sensex fell sharply by 227 points triggering panic. The only silver lining was that foreign institutional investors (FIIs) remained bullish believing the market was at attractive valuation.

Rumours about the payment crisis in leading stock exchanges as well as the ``imminent'' downfall of the Central Government owing to revelations about a defence deal, created chaos. However there were no benefits from this, except that some were able to cut their losses by exiting early. The market became bit of a lottery with very few trades going through.

All these sent the Sensex on a roller coaster ride as it fell to an intra-day low of 3436.75, which was the 52-week low. The market witnessed a fluctuation of more than 370 points today. The BSE Sensex opened at 3605.53, touched a high of 3777.48, dipped to 3436.75 before closing at 3540.65, a net loss of 227.24 points against its previous close of 3767.89. The losses were broad- based with 29 of the 30 Sensex stocks ending in the red. The last 30 minutes of the closing session saw the Sensex recovering by 112 points from the day's low. On the National Stock Exchange (NSE), the Standard & Poor CNX Nifty Index closed at 1124.70 losing 73.25 points.

Sensex stocks such as ACC, TISCO and MTNL lost over 15 per cent of their value. An array of technology stocks including Wipro, Digital Equipment and HFCL hit their 16 per cent lower limit of the day reflecting a distinctly weak sentiment in the market following the Nasdaq dipping below the 2000 mark on Monday.

``It is time the torch bearers of infotech companies, Mr. Narayan Murthy (of Infosys) and Mr. Azim Premji (of Wipro) take the initiative and explain the business position for the next two quarters,'' said Mr. V. R. Srinivasan, Managing Director, R.K. Chari Stock Broking. In the absence of such clarifications, one cannot prevent the public from succumbing to rumours including the one that Infosys had given pink slips to 30 employees at its Chicago office. ``They should realise and understand the mayhem, their actions or lack of it is creating in the market,'' he added.

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