Sensex crashes 230 pts

ANDHRA TREMOR ROCKS MARKETS

Rs 54,000 cr market cap wiped out.

The Telugu Desam Party fell with a thud in the Assembly elections in Andhra Pradesh and the tremors shook Dalal Street. The Bombay Stock Exchange (BSE) Sensex crashed by a massive 246 points in intra-day trades to the day's low of 5,309.42, before recovering slightly to close at 5,325.90.

Today's 4.14 per cent loss (229.94 points) at close was the single biggest fall since July 24, 2000, the biggest in the current calendar year and the tenth largest fall in the last 10 years.

The election results in Andhra Pradesh wiped out Rs 54,000 crore in market capitalisation in a single day, the fourth largest single-day fall in the capital market's history. The largest fall was on January 21, 2004, when market capitalisation of Rs 64,000 crore evaporated in a day.

Today's spectacular fall in the share indices was in contrast to the position in other Asian markets. Stock market indices in the Asia-Pacific region stabilised today, the exceptions being those of Pakistan, Malaysia, the Philippines and India.

After today's bloodbath, the Sensex has lost 431 points in the last three trading sessions, and a good 600 points from the recent one-month high of 5,925.58 on April 23. The market has lost capitalisation of over Rs 91,242 crore since the second exit poll, on May 6, set the cat among the pigeons.

The market breadth was negative today, with losers outpacing gainers 5:1 on the BSE. All the 30 scrips in the Sensex basket ended the day with losses and 76 scrips touched three-month lows.

Today's decline comes on the back of foreign institutional investors (FIIs) selling Indian shares worth Rs 595.20 crore in the cash segment on Monday. FIIs were also net sellers to the tune of Rs 500.67 crore in index futures and Rs 99.04 crore of stock futures in the derivatives segment on Monday.

Thus, FIIs have sold shares worth Rs 845.10 crore in the cash segment alone this month, according to data on the Securities and Exchange Board of India (Sebi) website.

Among indices, the BSE PSU index was the largest loser today, falling 5.16 per cent on fears that the disinvestment process would be hit the most if no party gets a clear mandate. The BSE Bankex fell 4.75 per cent and the consumer durables index was down 4.68 per cent. Fears of a hike in US interest rates and rising oil prices dampened sentiments further.