The Bombay Stock Exchange (BSE) ended in the red for the fourth consecutive session on Thursday.
The sensex ended 35.75 points lower at 3190.35, its lowest closing since November 27 last year. So far this week the index has fallen nearly 3 per cent. Dealers said the fall was due to unwinding by bull operators, who had built up positions ahead of the annual budget. Selling by foreign institutional investors also added to the negative sentiment.
Losers outnumbered gainers by a ratio of about two to one in slightly lower volumes (6.27 crore shares), as compared with 6.5 crore shares on Wednesday. Meanwhile, at the National Stock Exchange, the Nifty index dropped 9.45 points to 1031.25.
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Marketmen said lack of buying support from the both local as foreign institutions was holding the market back.
Selling pressure was seen almost across the board, except for select pharma and PSU stocks.
Dealers said positions in the derivatives segment were also being liquidated. With stock prices falling margin calls are being triggered in many stocks. Rumours are also doing the rounds that some large brokers could be facing a payment crisis. Offshore funds have pulled out shares worth $5.2 million in March so far. Their purchases had dwindled to $84.6 million last month after net inflows of $221.4 million in January.
Reliance Industries fell 1.42 per cent to Rs 284.95 on reports that oil marketing companies have stopped paying import parity prices for petroleum products. State Bank of India ended 1.56 per cent lower at Rs 280.50 on reports that the government has ruled out raising the foreign fund investment limit for now.
The government is reportedly waiting for the passage of a bill which proposes to lower government holdings in state-run banks to 33 per cent from 51 per cent.
Technology stocks slipped after a local brokerage SSKI Securities slashed share price targets for leading software firms on fears of slower-than-expected earnings growth caused by tighter profit margins.
Infosys Technologies fell 2.06 per cent to Rs 4,098.10 and Satyam Computer Services shed 2.18 per cent to Rs 213.10.
Tata Steel was down 3.40 per cent at Rs 142.10 on selling pressure and unwinding in the derivatives segment.
Zee Telefilms was down 2.92 per cent to Rs 74.85. The scrip touched a new 52-week low of Rs 74.05 during intra-day trades.