Sensex suffers first new year low, slips 477 pts

Weak global cues, lack of fresh buying and unwinding of positions by investors to create liquidity for two major initial public offers (IPOs) "" Reliance Power and Future Capital Holdings "" triggered a nearly 500 point fall for the bellwether Bombay Stock Exchange (BSE) Sensex today.

This is the biggest single-day fall for the index in the new year.

The Sensex plunged by 2.30 per cent or 476.96 points to end at 20,251.09 points. The 50-share S&P CNX Nifty closed at 6,113.45 points, down 1.5 per cent or 132.55 points.

The fall in the Indian markets was in line with the performance of other Asian markets. Hong Kong's Hang Seng was down 2.38 per cent or 630.35 points, Japan's Nikkei 225 fell 0.98 per cent or 138.16 points and Indonesia Jakarta Composite tumbled 2.86 per cent or 80.3411 points.

Market participants feel that the lack of fresh buying has pulled the market down. With two IPOs mopping up around Rs 12,000 crore, the market seems poised to show further weakness, at least till fresh foreign institutional money enters the market.

"In the last couple of days, the market was supported by the IPO buzz but fresh buying is not coming in, leaving the market weak," said Kamlesh Kotak, vice-president, research, Asian Markets Securities. 
 

DOWNER
Sensex gainers
Share price in Rs	Jan 15, 08	% Chg*
Tata Steel	851.85	1.54
Maruti Suzuki	867.25	1.44
Tata Motors	769.25	0.56
Sensex losers
Bharti Airtel	857.30	-5.51
Reliance Energy	2364.55	-4.42
ICICI Bank	1351.40	-4.05
NTPC	274.00	-3.84
ITC	216.20	-3.70
* over previous close

Foreign institutional investors have not deployed money yet since there is no clear direction on the US economy. They sold a net of Rs 365.09 crore on Tuesday. Even domestic institutions turned net sellers, selling to the extent of Rs 89.74 crore.

Mutual funds are cautious waiting for corporate earnings to trickle in following which they may deploy money at lower levels.

"In fact, the market ignored the bad index of industrial production numbers on Friday. This has now led to fears of a slowdown in India unless there is a re-rating of earnings," said the head of an institutional broking house.

Market breadth has also suffered in the last couple of trading sessions with 988 advances to 1,869 declines in today's trading session.