Sensex down 34 points on FII selling

MUMBAI, SEPT. 25. After the overnight smart recovery, stocks once again got a severe beating, bringing the Sensex sharply down from the day's high to close with a loss of about 34 points on the Bombay Stock Exchange on heavy selling by foreign institutional investors.

The FIIs seemed to be uncertain about long-term investments and were generally seen pulling out from the market despite falling oil prices in Asia and reports about optimism of the International Monetary Fund (IMF) that higher growth in India, China, Russia and some other countries would help avert a global recession.

Though local funds led by Unit Trust of India extended some support at early stages, the FIIs were reportedly heavy sellers in key stocks, particularly in Hindustan Lever, Reliance Industries, ITC and L&T.

The BSE sensitive index opened firm at 2668.37 and later spurted to the intra-day high of 2727.32. However, stocks failed to maintain higher levels due to selling pressure during the latter part and the Sensex closed at 2613.53 against yesterday's close of 2651.78, netting a loss of 34.43 points or 1.30 per cent. The low of the day was 2613.53.

The initial rally that took the Sensex past the 2700-mark was attributed to the central bank's move yesterday to cut interest rates for both pre and post-shipment export credit by one percentage point, giving rise to hopes that the Bank Rate and the cash reserve ratio would be slashed shortly.

- PTI

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Section  : Business
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