Date:08/07/2006 URL: http://www.thehindu.com/2006/07/08/stories/2006070807691500.htm

Business

Sensex down by 258 points

MUMBAI: The Centre's decision to put disinvestment in public sector undertakings on hold triggered panic selling in frontline stocks, pulling the stock market index down by 258 points to 10509.53 on Friday.

Strong speculation that Prime Minister Manmohan Singh might resign as also that of a quarter-point rate hike by Bank of Japan weighed heavily on the market. The Bombay Stock Exchange 30-share sensitive index (Sensex), which initially seemed unfazed by the unexpected blow to economic reform and jumped to a high of 10887.67, later spiralled downwards as foreign institutional investors (FIIs) pressed heavy sales in frontline stocks, particularly in the heavyweighted Reliance Industries (RIL).

The Sensex plunged to the day's low of 10440.02 before closing at 10509.53 against 10767.97, a net loss of 258.44 points or 2.40 per cent.

On the National Stock Exchange, the S&P CNX Nifty tumbled by 80.55 points or 2.55 per cent to 3075.85.

Initially, the market seemed to have discounted all the negative factors but suddenly came under pressure after FIIs turned hostile following the developments, brokers said. — PTI