Asian flu pulls Sensex down 164 pts

Index closes at 8,377 on rising interest rates and stronger dollar.

Weaknesses in the Asian markets, combined with concerns that rising interest rates could hamper corporate growth and a strengthening dollar would make India less attractive to foreign investors, pushed the stock market deeper into the red in late afternoon trading on Thursday.

The Sensex, which was holding on to around a 50-point loss for much of the day, plunged later to close at 8,377, recording a 164-point fall. Including Thursday's fall, the Sensex has lost nearly 5 per cent in the past six trading sessions.

The National Stock Exchange's Nifty ended at 2537.30, down 52.25 points or 2.02 per cent. The market was bearish, with losers outnumbering gainers more than 2 to 1.

Dealers said a slowdown in fund flows to Asian markets was keeping investors nervous across the region. All Asian markets are in the red this week.

On Thursday, South Korea's Kospi and Taiwan's Taiex shed 2 per cent and 1 per cent, respectively. In the Indian markets, FIIs have been net sellers in October to the tune of $128 million.

During the day, the Sensex saw a high of 8547.80 and low of 8346.32. All major indices fell over 2 per cent. The BSE mid-Cap index continued its slide for the sixth consecutive day to close at 4113.01 on Thursday.

But, the worst-hit counter was the BSE small-cap index, which lost around 333 points or 6 per cent in the past six trading sessions to close the day at 5579.18. 
 

LOSING GROUND
Top ten losers	Price (Rs)	% chng
Ranbaxy Labs	458.40	-6.29
Tata Steel	376.50	-4.41
Dr Reddy's Labs	897.00	-4.31
Hero Honda	702.20	-3.70
Tata Motors	540.35	-3.32
Grasim Ind	1229.10	-3.25
Hindalco	137.00	-3.11
Maruti Udyog	558.10	-2.49
ICICI Bank	525.60	-2.34
ONGC	1029.75	-2.28

The biggest loser among the index shares was Ranbaxy Laboratories after it lost a patent challenge in the UK yesterday. The stock fell 6.3 per cent to Rs 458.40. Tata Consultancy Services and Infosys Technologies fell more than 2 per cent.

Among other stocks that moved sharply were Tata Tea, which firmed up 0.5 per cent to Rs 817 after it said it would buy US specialty tea brand Good Earth Teas. ICICI Bank lost 2.3 per cent to be at Rs 525 ahead of its quarterly results.

"The FII inflow has slowed down with a majority of them booking profits across the globe. The Sensex may further slide but should find its support around the 8100 level", said Pranav Parekh, a BSE broker.

"The volumes are less and many people, who entered late in the mid-cap and small-cap segment at higher levels, are just stuck", Parekh added.

VVLN Sastry, country head, First Call India Equity Advisors Ltd, said, "The markets on Thursday were volatile, first on the pretext of Ranbaxy losing its legal battle, giving a negative signal to the market, and also due to a lack of buying, which brought the Sensex under pressure."

Steel and metal scrips were also hit badly on the news of copper prices going down at the London Metal Exchange. Tata Steel fell 4.41 per cent to Rs 376.50. The other steel major, SAIL, was also down 6.44 per cent to Rs 57.35.

"Historically, the markets have witnessed a dearth of inflows of foreign funds in the months of October and November," said Vipul Sharma, senior associate, equity sales, at Darashaw Broking.

The market was expecting the Sensex to find support at the 8410 level, beyond which it could slide further to hover around the 8100-8200 levels, he added. Analysts now expect further movements in the market to be stock-specific rather than being driven by sectoral performance.