Key indices tumbled over 3 per cent on Thursday, as rumours of nationwide Income tax raids on stock-brokers sparked off panic-selling. |
A finance ministry official later clarified there were no special raids. All the index stocks closed in the red, shedding 1-10 per cent. Mid and small-cap stocks, where retail investors have higher exposure, were worst-hit. |
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The Bombay Stock Exchange's 30-share Sensex closed at 8221.64, down 265.50 points, or 3.1 per cent from Wednesday. This is the largest single-day fall since April 15, when it had plunged 3.4 per cent. |
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The National Stock Exchange's 50-share Nifty shed 90.80 points, or 3.5 per cent, to close at 2476.50. This is also the largest single-day fall in the Nifty since May 28, when it had slumped over 4 per cent. |
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In absolute terms, today's fall is the biggest since May 17, when key indices had closed 12 per cent down, after tumbling 15 per cent intra-day. |
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Dealers said the steep fall today could have prompted margin calls, in turn triggering further sales, as players unable to cough up additional margins may have unwound their long positions. |
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Players had been bracing for a correction for sometime now, following the 12 per cent rise in major indices in just three weeks. Traded turnover on both the exchanges combined today was Rs 123 billion, compared with Rs 140 billion on Wednesday. On the BSE, 96 per cent of the total stocks traded ended in the negative zone. |
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Among frontline shares, Zee Telefilms and Videsh Sanchar Nigam fell sharply, shedding 10 per cent over Wednesday. VSNL closed at a 2-month low of Rs 347.55. |
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In the CNX Midcap Index, only four stocks managed to close higher, with Sesa Goa, up 4 per cent, being the major gainer. Shares of Reliance Capital and Indiabulls were the major losers, shedding around 15 per cent each. |
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Hexaware Technologies, Chennai Petroleum Corp., Balrampur Chini, Moser Baer, Apollo Hospitals Enterprises, Hinduja TMT, Amtek Auto and Polaris Software Labs fell 8-10 per cent. |
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The BSE 500 Index fell 4 per cent to close at 3356.11 points, while the S&P CNX 500 was down 4 per cent at 2167.10. Over the last few days, stock exchanges have moved many mid-cap and small-cap stocks into the trade-to-trade segment, in a bid to check price manipulation. |
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The market was gripped with rumours right from the start of the session today that the IT department was conducting raids on major stock-brokers in Ahmedabad as well as Rajkot district of Gujarat. |
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