Sensex dips 195 on global worries

Investor wealth drops Rs 57,199 cr in 2 days.

Shares buckled today, for the second day in running, under the combined weight of profit-booking ahead of the second quarter results and worries in the global markets about rising inflation and interest rates in the US.

Apart from some speculative unwinding, some funds were cutting exposure to the market to avoid the risk attendant with second quarter results.

All major indices fell over 2 per cent. The BSE Sensex slumped 195.77 points or 2.24 per cent to 8,528.70, its biggest fall in two weeks. The National Stock Exchange's 50-share Nifty closed at 2,579.15, down 65.25 points, or 2.5 per cent.

In the last two trading sessions, the Sensex has fallen 271 points and eroded Rs 57,199 crore worth of investor wealth. The total market capitalisation of the BSE now stands at Rs 22.92 lakh crore.

On the BSE, losers outnumbered gainers by more than three to one.

Interestingly, the fall came on the back of higher volumes. In the derivatives segment, trading volumes were up 34 per cent or Rs 6,374 crore, while in the cash segments, volumes were up 10 per cent.

Banks, technology and metal stocks were the biggest drags in the market today. Oil marketing companies showed some strength because of easing international crude oil prices. On the weakest wicket was BSE Bankex, which fell 3.27 per cent. Mid-caps and small-caps fell marginally by over 1.5 per cent.

Uncertainties about interest rates and potentially weak core earnings numbers this quarter was keeping investors divided at the bank counters, dealers said.

Among the frontline stocks, the major losers were HCL Technologies, ICICI Bank, Tata Steel, and National Aluminium - all fell over 5 per cent.

Other major Asian markets also slipped. Japan's Nikkei was down 2.4 per cent, while Hong Kong's Hang Seng and South Korea's Kospi shed 2 per cent each. Singapore's Strait Times Index was down 1.6 per cent, while Taiwan's Taiex registered a minor loss, down 0.6 per cent.

Several funds were booking profits and waiting in the sidelines.

The latest blockbuster, Magnum Multi-cap Funds, created yet another record by collecting over Rs 2100 crore, the highest ever by an open-end equity fund in a public offer. Dealers say that the market is prepared for a daily volatility of 2 per cent this month as expectations are running high and that not all companies will be able to live up to market expectations.