Debating India

Sensex plunges below 10000

Wednesday 7 June 2006

MUMBAI: A rush of selling by investors at the eleventh hour shaved off 256 points from the stock market, sending the barometer index toppling down to below 10000-level, less than a month after touching a peak of 12671.11.

The Sensex overcame initial weakness and was hovering around the 10000-level, but renewed selling in the last 30 minutes of trading pushed the index to a four-month low of 9957.32, a net fall 256.16 points or 2.51 per cent from Monday’s close. This was the first since February 17 that it is closing below the 10000-mark. It touched a high of 12671.11 on May 11.

On the National Stock Exchange, the S&P CNX Nifty dropped to 2937.10. Earlier, the market had regained some lost ground after touching the day’s low of 9884.89 on fairly heavy purchases in the form of short-covering in the Futures and Options segment after mid-session.

Investors were visibly confused over the dramatic crash at the fag end, during which the market witnessed a deluge of sell orders with buyers few and far between.

The world-wide gloom largely attributed to concerns over higher inflation, upward spiral in oil prices as also indications of further hikes in the U.S. Federal rates compounded the negative sentiment across the sectors, market players said.

Key global indices suffered a sharp setback. The Dow Jones Industrial Average posted its third-largest decline of the year on Monday as economic worries rattled investors.

Only three of the 30-Sensex shares managed to buck the trend. A sharp rise in prices of petrol and diesel also had an adverse impact on sentiment.

Underlining 9600-9700 as the major support level for Sensex, analysts felt that the market might undergo a long-term downward correction once the support level was broken.

The volume of business improved moderately but was still low at Rs. 3,010.42 crore. - PTI

See online : The Hindu

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