Sensex falls 110 pts in FII-led sell-off

Sensex falls 110 pts in FII-led sell-off
ENS ECONOMIC BUREAU

July 17: Stock markets on Monday crumbled under heavy offloading by foreign institutional investors (FIIs) and bull operators in index-based software and select old-economy shares. The benchmark Sensex fell by 109.50 points to close at the day's low of 4747.32 on the Bombay Stock Exchange (BSE).

The main contribution for the fall came from stocks like HLL, ITC, MTNL, and NIIT. While HLL, ITC and MTNL dipped more than 5 per cent each, NIIT was down by 11 per cent. Other index-based counters like Infosys, Satyam Computers and Zee Telefilm also remained weak. With the latest fall, the stock is below its short-term support, and the next major base for the stock is only at around 4600 points. It would face a strong resistance at around 4940 points.

However, majority of the pharma counters continued to be in limelight on FIIs as well as local funds buying support and showed widespread gains. Despite a bullish trend on the Nasdaq Stock Market for the last three successive days, software scrips drifted further downwards on heavy selling by FIIs. ``Unloading of outstanding positions by operators also partly affected the market sentiment,'' said a broker.

The BSE Sensex opened better at 4874.41 and immediately logged the day's high of 4883.30. Thereafter, it hovered in negative territory throughout the day and closed at the day's low of 4747.32 as against last Friday's close of 4856.82, a big loss of 2.25 per cent. The BSE-100 index also dropped by 39.49 points to 2393.27 compared with previous close of 2432.79.

FIIs picked up shares of pharma companies like Glaxo, Novartis, Rhone Poulenc, Parke Davis, Pfizer, Dabur India and other old-economy counters. Some of the fast moving consumer goods (FMCG) scrips wiped out part of their last Friday's gains on profit-booking. Out of 140 specified shares, 50 registered losses while 89 recorded gains.

Satyam Computer dipped by Rs 82.25 to Rs 2882, Infosys Tech by Rs 81.15 to Rs 7650.65, Zee Telefilms by Rs 9.45 to Rs 518.25, HLL by Rs 17.50 to Rs 277, ITC by Rs 43.25 to Rs 779.05, L&T by Rs 12.05 to Rs 257.15, M&M by Rs 6.65 to Rs 211.05, MTNL by Rs 11.45 to Rs 193.10, Nestle by Rs 9.70 to Rs 455.25, NIIT by Rs 222.95 to Rs 1738.85 and SBI by Rs 1.55 to Rs 222.55.

However, ACC firmed up by Rs 5.30 to Rs 139.30, BSES by Rs 6.60 to Rs 254.40, Glaxo by Rs 16.70 to Rs 448.10, Hindalco by Rs 33.10 to Rs 849.70, Novartis by Rs 36.70 to Rs 917.30, RIL by Rs 1.90 to Rs 361.80 and TISCO by Rs 5.35 to Rs 143.15.

Telecom shares MTNL and VSNL fell following the government move to open up the telecom segment. ``Day-long selling in most of the pivotal counters pulled the Sensex down by 109 points on Monday, the first day of trading in the new settlement on the BSE. As selling pressure mounted in the counters like HLL, ITC, MTNL and to some extent in Infosys, some of the other technology counters also came under the hammer,'' said a broker, adding, ``For Tuesday, the undertone is still weak and there is still some downside from the current levels.''

According to market players, FIIs are now shifting their positions to FMCG and pharma counters and getting out of new economy counters. Operators who had built up positions in frontline technology stocks on expectations of good results and a good follow-up rally, are now finding it difficult to hold to their positions.

On the other hand, weak operators are getting jittery about the huge FII outflows. According to Sebi's FII investment figures for Friday, net selling by the foreign investors was worth Rs 204 crore. This accounts for more than half the total outflow during the current month, which is at Rs 406.4 crore. On Friday, gross purchases by the FIIs was at Rs 322 crore while gross sales was at Rs 526 crore.