Red bug bites market, Sensex slides 150 pts

The Left Front's victory in Kerala and Bengal and jitters about the Red stalling the reforms process dampened market sentiment for the second consecutive day on Friday.

The domestic bourses opened weak and the indices stayed in the red through the trading day. The Sensex ended trade lighter by 150 points at 12,285, a loss of 1.2 per cent from Thursday's close.

The Nifty opened marginally higher but selling pressure through the day dragged it down. the 50 stock index closed trade at 3651, down by 51 points.

Market analysts say that the Left parties would take tough posture now and all reform processes would be affected.

"If at all reforms in certain sectors go through, the time lines would be significantly extended now as the Left would have to be taken into confidence at every stage," said an analyst.

The first display of this would be in the raising of oil prices. "Even if the government manages to pass 25 per cent of the burden, the markets will take it positively," said. Ajit Surana, managing director, Dimensional Securities Pvt. Ltd.

With the Union Commerce Minister Kamal Nath asking cement companies to effect a downward price revision, cement stocks were the worst hit on Friday.

Gujarat Ambuja and ACC were the biggest losers among the Sensex stocks, with both counters shedding over 7 per cent on Friday's trade. Overall, the Sensex has lost over 327 points in the last two trading sessions.

While market analysts are reluctant to say that this is the beginning of an extended period of corrections, there are concerns that the markets may take into cognisance now all the factors that it had ignored so far.