Sensex dips to lowest close in '04

Rs 2,07,136 crore m-cap wiped out since Jan 14.

Widespread selling pressure ahead of year-end closing, coupled with lack of buying interest in the week when March derivatives contracts expire, led the market to its lowest close in 2004.

The Bombay Stock Exchange (BSE) Sensex closed at 5,365.40, 1.43 per cent (78.04 points) lower than Friday's close. The last time the market closed at these levels was on December 12, 2003 (5,315.81).

But more importantly, the turnover in the cash market was at a six-month low, with the BSE recording a turnover of Rs 1,702.06 crore and the NSE Rs 3,562.91 crore. Reflecting the market sentiment, the market breadth was extremely negative, with losers outpacing gainers 1,407:359. The market has now fallen 879 points from 6,194.11 on January 14, its highest close in 2004.

The BSE capital goods index was the biggest loser, down 4.65 per cent, the IT sector index fell 3.09 per cent, the consumer durables index fell 2.97 per cent and the PSU index was down 2.52 per cent.

With the markets volatile, Rs 2,07,136 crore in market capitalisation has been wiped out since the BSE Sensex peaked at 6,194.14 on January 14, 2004. The major fall, however, has come in the last 10 trading days of the current month, contributing nearly two-thirds of the total fall (Rs 1,29,196 crore).

In the aggregate, the market cap of all traded stocks on the BSE stood at Rs 11,16,140 crore on March 22, 15.6 per cent lower than the market cap of Rs 13,23,278 crore on January 14, 2004.

The Reliance Industries scrip's price fell 2.88 per cent to Rs 507.95 and State Bank of India was down 2.61 per cent to Rs 551.30 while FMCG heavyweight Hindustan Lever was up 1.12 per cent to Rs 149.55 and ITC was up 0.51 per cent to Rs 1,074.15, bucking the trend somewhat.

The price of the Bhel scrip declined from an intra-day high of Rs 597 to Rs 525 before settling at Rs 528.20, down 6.66 per cent from its previous close. From a recent high of Rs 641.40 touched on March 9, the Bhel stock has already lost 17.64 per cent.

Other PSU pivotals like MTNL (down 1.42 per cent to Rs 128.10), ONGC (down 1.33 per cent to Rs 846.60) and HPCL (down 0.26 per cent to Rs 467.80) also ended lower on selling pressure.

Tata Steel (down 5.95 per cent to Rs 365.10) lost further ground as selling continued almost unabated on the counter. From a recent high of Rs 451.80 touched on March 8, the Tata Steel stock has lost 19.18 per cent. Tata Motors (down 4.50 per cent to Rs 433.90) and Tata Power (down 4.06 per cent to Rs 342.65) also ended lower on sustained selling pressure.

Wipro slipped from a high of Rs 1,438 to Rs 1,372.15, before settling at 1,381.15, down 3.11 per cent from its previous close. The other tech pivotals Satyam Computer (down 2.95 per cent to Rs 295.80) and Infosys Technologies (down 2.03 per cent to Rs 5,081.60) also ended lower on sustained selling, following the tech-led fall in the US markets on Friday.

Said a dealer at a local brokerage, "The markets are usually volatile as the expiry of the futures contracts nears." He added that the expected buying support at lower levels is not being seen as most players are now playing the wait and watch game. Investors are said to be booking short-term losses in stocks in order to reduce tax liabilities for the year after having made profits in the recent rally.

Mid cap and small cap stocks have been the worst hit in the market carnage in the last two and half months, with almost 30 per cent of their market cap wiped out since January 14, 2003. Although no group has escaped unscathed, almost 96 per cent of the mid cap (B1 stocks) have recorded falls. In the A group, 89 per cent stocks lost market capitalisation while in the B2 and Z groups, 75 per cent of the stocks were losers.

The market cap of A group stocks is currently 13.57 per cent (Rs 1,55,979 crore) of its peak. The B1 group's market cap depreciated by Rs 38,272 crore (29.02 per cent) while B2 and Z group stocks saw an erosion of Rs 12,886 crore (30.4 per cent) in market capitalisation.

The 30 scrip BSE Sensex registered a fall of 13.38 per cent (828 points) since its January peak of 6194. The market capitalisation of the BSE Sensex scrips is down Rs 75,548 crore, and of the S & P CNX Nifty basket is down Rs 96,075 crore while BSE-500 registered a fall of Rs 1,84,300 crore in market capitalisation.