Blue chips lead Sensex decline

However, the Sensex is still up by around 60 per cent from the six-month low it hit in late April this year.

The Nifty index also shed 23.65 points, to end at 1470.45 today. With this, the Nifty has lost 79.75 points, or 6.45 per cent, this week.

Several factors contributed to the huge slide in the stock indices. The massive outstanding positions in the derivatives segment have made traders nervous and most of them are offloading ahead of the expiry of the contracts next week.

There was a selloff in the Asian markets, which itself was a spillover of the bearish sentiment on Wall Street following disappointing third -quarter results by US companies.

Moreover, the Tokyo market was down by around 5 per cent, the Hang Seng slid more than 500 points while the Seoul Composite Index went down by around 25 points.

Said Ved Prakash Chatur- vedi, CEO, Tata Mutal Fund: "The market is in a correction mode after the swift run in the last few days. I think this consolidation is healthy."

Sanjay Sinha, fund manager at UTI Mutual Fund, said most big investors were aligning their portfolios to the latest corporate earnings, which have been in line with expectations.

Nimesh Shah, director, Fortune Financial Service, pointed out that traders continued to unwind open positions in the derivatives segments on higher margins.

Satyam Computers fell 2.7 per cent to Rs 270 despite reporting second quarter results above expectations and an upward revision of its earnings forecast.

Infosys Technologies, too, declined 2.2 per cent to Rs 4409.85.

Selling in blue chip stocks also dragged the Sensex down. Hindustan Lever went down 1.86 per cent to Rs 182.40, while the State Bank of India ended down 1.13 per cent to Rs 484.40.

ITC went down 3.7 per cent to Rs 844.15 and Reliance Industries Ltd lost 2.7 per cent to end at Rs 457.40.

Domestic mutual funds have also been selling scrips. This has added to the weakness in sentiment. In the derivatives segment volumes on the NSE were Rs 9531.33 crore, reflecting the volatility in the market. Dealers said that the volatility would continue till the expiry date, next Thursday.

The movements of foreign institutional investors (FIIs) are being monitored. According to market watchers, the exposure of FIIs in the index and individual stock futures are being pared.

The FIIs pumped in a net Rs 286 crore on Tuesday, marginally down from Rs 318.90 crore on Monday. FII inflows for October 2003 have touched Rs 5,641 crore.

On the BSE, the turnover went down to Rs 2063.27 crore from Rs 2,234.66 crore on the previous day with 12.90 crore shares being traded.