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Posted : Wednesday, July 2, 2008
MUMBAI:Is it a panic situation on Dalal Street now or is a temporary market bottom justround the corner? With a barrage of bad news hitting investor sentiment fromevery possible side, that's the question market players are trying to answerafter the Sensex lost nearly 1,500 points, or over 10%, in the last threesessions to a 15-month low of 12,962. The day's session made investors poorer byRs 1.74 lakh crore with BSE's market capitalisation now at Rs 41.58 lakhcrore.
On Tuesday, after amuted opening, Sensex fluctuated for till the mid-session. But after the eximdata hit the market, that showed a trade deficit of over $20 billion in thefirst two months of the current fiscal, the rupee came under severe selling.With the rupee weakening against the dollar, FIIs stepped into the market tosell. "There were some buy orders in the morning but after mid-session, FIIsturned big sellers," said an institutional dealer with a localbrokerage.
As a result, theSensex reached an intra-day low at 12,904 towards the end and ended slightly offthat mark. The last time the index had hovered around these levels was in thefirst week of April 2007. At Tuesday's close, the Sensex is down 39% (or 8,250points) from its all time high of 21,207 on January 10. So is the bottom near?The market is clearly divided onthis.
One group believes thatvery soon market could arrest the slide and give some respite to investors.
"These kinds of sharp falls,combined with low volumes, indicate it is lack of buying that is pulling themarket down," said Arun Kejriwal, director, KRIS, an investment advisory firm.
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