Markets jittery ahead of third round polls

FII sales data pull sensex down, Re plunges to 45.03.

Political uncertainty and data revealing heavy selling by foreign institutional investors led to a 1.2 per cent drop in the Bombay Stock Exchange (BSE) Sensex and a big fall in the rupee on Monday.

Latest data from the Securities and Exchange Board of India show that foreign institutional investors (FIIs) had pulled out a record Rs 332 crore on Thursday.

Commodity stocks led the fall on bourses, in line with the trend across Asia, after China took steps to cool its overheated economy.

And importer covering and arbitraging (between the domestic and overseas non-deliverable forwards markets) by foreign banks pushed the rupee to its lowest level since late March to 45.03 per dollar. It later clawed back to close at 44.82/87.

Foreign exchange dealers expect the rupee to slip further and end below the 45 per dollar level over the next few days.

Meanwhile, traded volumes on the bourses were distinctly low yesterday. The cash market turnover on the BSE was just Rs 2,152.03 crore, while on the National Stock Exchange, it stood at Rs 4,860 crore.

Sandip Sabharwal, a fund manager with SBI Mutual Fund, said, "There was visible lack of buying. Players seem to be in a wait-and-watch mode before the third round of elections."

The breadth was very negative with 20 of the 30 Sensex shares declining. Losers outpaced gainers 3:1 on the BSE.

Among commodity stocks, Grasim was the biggest loser in the Sensex basket, closing 6.43 per cent lower at Rs 1,156.85, while Hindalco fell 4.33 per cent to Rs 1,066.45 and Tata Steel 4.28 per cent to Rs 342.50.

Other heavyweights displayed a mixed trend. The State Bank of India share fell 3.76 per cent to Rs 618.45, while Hindustan Lever was up 1.13 per cent to Rs 142.80.

Tobacco to hotels major ITC edged up 0.60 per cent to Rs 1,082, and Reliance Industries gained 0.36 per cent to Rs 528.30.

Zee Telefilms was the biggest gainer on Monday, rising 4.27 per cent to Rs 133.

Among other barometers, the BSE PSU index plunged 2.93 per cent, underscoring fears on the fate of disinvestment.

Among public sector counters, HPCL was down 4.39 per cent to Rs 440.25, MTNL fell 3.07 per cent to Rs 143.70, ONGC slipped 2.59 per cent to Rs 818.25 and Bhel tripped 1.67 per cent to Rs 576.55.

The BSE Capital Goods index fell 2.25 per cent, the Consumer Durables index was down 1.74 per cent, the Bankex fell 1.62 per cent and the IT index fell 0.62 per cent.

Among software stocks, Satyam Computer fell 3.35 per cent to Rs 310.10, while Infosys Technologies was up 0.70 per cent to Rs 5,183.10, and Wipro gained 0.52 per cent to Rs 1,552.45.

The FMCG index bucked the trend, ending 0.23 per cent up.

The L&T share slid 3.06 per cent to Rs 550, ACC fell 2.93 per cent to Rs 271.75 and Gujarat Ambuja Cements 2.78 per cent to Rs 323.35.

Pivotals Hero Honda was down 4.27 per cent to Rs 462.20 and Maruti Udyog fell 1.70 per cent to Rs 534.80.