Sensex on roller coaster ride, surrenders whopping 227 points

MUMBAI, MARCH 13. It was a bloodbath on the Bombay Stock Exchange today as the BSE barometer nosedived to close with a whopping 227 point fall after a roller coaster ride of over 1000 points in a single day following heavy winding up by operators and speculators amidst aggressive purchases by local institutions.

In three consecutive sessions, the premier bourse, rocked by a string of allegations and price manipulations, has lost over 516 points.

The panic selling during the second half of the session extended till 5 p.m. was triggered by strong fears of political instability following the display of a transcript of a defence deal on a web site.

In a day of unprecedented swings that saw the Sensex leaping up and down by over 340 points at a stretch, the index fluctuated wildly in a range of 3777.48 and 3436.75 before ending at a 22- month low at 3540.65 against Monday's close of 3767.89, a net fall of 227.24 points or 6.03 per cent.

Investors and operators were panic stricken and watched in disbelief the drama unfolding during the seven-hour trading that was packed with negative and positive developments.

The market was badly hit in the early stages by the drastic action by the Securities and Exchange Board of India (SEBI) restraining all elected broker directors of the BSE, as over 70 per cent stocks got stuck in the 8 per cent lower circuit.

Sentiment was also dampened by the Wall Street carnage which spread across the globe sending stocks on all major bourses into a tailspin.

The Nasdaq composite index dipped by 6.3 per cent to close below 2,000 for the first time in 27 months. Southeast Asian stocks also crashed in line with Wall Street.

The BSE benchmark, however, bounced back and was quoted a little over yesterday's close during midsession in the wake of aggressive purchases by domestic financial institutions and funds despite redemption pressure.

The aggressive entry of local financial institutions was well supported by the government's announcement of a three-point strategy to corporatise stock exchanges, give more teeth to 1992 SEBI Act and extend rolling settlement to 200 category `A' stocks by July. While the rolling settlement made brokers hesitant to some extent, the broking fraternity welcomed the government's steps to ensure operations of the capital markets in an orderly, transparent, safe and fair manner for all investors.

The market would have fallen further sharply had it not been for a smart recovery by over 100 points from the low of 3436 at the fag end following hectic short covering by domestic operators and speculators, who were only interested in squaring up their positions.

The onslaught was so widespread that only four specified scrips NIIT, Hero Honda, Bank of Baroda and Novartis could notch up small gains.

The BSE-100 index also suffered a sharp setback falling by 127.10 points to 1678.02 from 1805.12.

The BSE-200 and the Dollex were quoted down at 363.75 and 129.93 against 391.70 and 140.09 respectively. The BSE-500 tumbled by 81.83 points to 1072.34 from 1154.17.

The volume of business was low at Rs. 2,464.61 crores, but moderately up over yesterday's turnover of Rs. 1,409.31 crores. Infosys Technologies were the most active share, recording the highest turnover of Rs. 369.35 crores followed by Satyam Computer (Rs. 253.77 crores) and Reliance Industries (Rs. 224.04 crores).

Wipro, Himachal Futuristic, Global Telesystem, Digital Equipment, ACC, Cummins and Amara Raja Batteries were locked in the 16 per cent lower price band at close.

- PTI

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