Unabated selling pressure by foreign institutional investors (FIIs) coupled with turmoil on the political front continued to drag stock indices southwards for the third successive trading day of the week.
The 30-scrip Bombay Stock Exchange (BSE) sensex crashed to an intra day low of 2924.24 before recovering marginally but failed to close above the crucial support level of 2951.
The sensex closed at 2950.80, a loss of 19.84 points from the previous close.
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The National Stock Exchange -50 (Nifty) closed at 860.10, a loss of 6.40 points over the previous close.
On the NSE, FIIs were net sellers to the tune of Rs 42.53 crore.
As a result of on going FII sales, the sensex has lost 31.07 per cent in value from April 21, 1998 as it has dropped from 4280 to 2950.70. BSE's total market capitalisation, in contrast, has shrunk by 27.36 per cent from Rs 522721.25 crore to Rs 414615.19 crore as of yesterday.
The weak sentiments prevailing at the bourses is evident from the fact a number of index scrips are quoting at their all time lows.
In the specified group on the BSE, SAIL and IDBI touched new all time lows yesterday while 19 other scrips too touched new lows, ranging from 2 year lows to 8 year lows. Chief among them were Tisco, Arvind Mills, Grasim(all 8 year lows) while Indian Hotels, IPCL, Tata Power and Mahindra & Mahindra touched new 5 year lows. Key Birla group stocks, Hindalco, Grasim, Kesoram Industries and Indian rayon were all quoting at new lows yesterday.
The market plunged to an intra day low of 2924.24 within the first 15 minutes of trading. However hectic short covering coupled with aggressive buying support from domestic institutions steadied the sensex soon after.
Market players feel the currency factor in China and Japan and the political situation at the Centre would be the key factors determine the trend at the bourses.