Sensex meltdown continues

STOCKS REPORT

Lack of buying momentum and selling presssure on low volumes (Rs 1,452.60 crore) pulled the market down for the third consecutive day.

The fall was triggered by heavy selling in steel sector stocks following remarks by the steel minister that the government is considering setting up a regulatory body for the sector.

The 30 share BSE Sensex in a volatile trading session lost 86.70 points to close at 4,746.01. The Nifty lost 27.10 points to close at 1,481.35.

Dealers said, "Irresponsible statement by the ministers is making the markets jittery as the buying momentum was completely absent in Monday's trading. Steel triggered the early morning collapse after which it was an across the board selling."

Steel majors, Steel Authority of India was down 8.46 per cent to Rs 26.50 while Tata Steel ended 5.88 per cent to Rs 272.90 following aggressive selling by institutional sellers.

Analysts attribute the steel minister's statement that the government is considering to form a regulatory body for the sector as reason for aggressive selling. The steel ministry may also consider scrapping the 5 per cent import duty to prevent any sharp rise in steel prices.

Cement pivotals Grasim was down 6.40 per cent to Rs 932.45, Gujarat Ambuja Cements was down 4.78 per cent to Rs 269.75 and ACC was down 3.65 per cent to Rs 236.25 dropped amid fears that the pricing power of cement makers may be affected by a move by the steel ministry to form a regulatory body to monitor steel prices.

Heavyweight, State Bank of India was down 6.11 per cent to Rs 439.65 on concerns that a rise in the interest rates will affect the banks treasury income.

Others such as ITC, down 1.52 per cent to Rs 878.20 and Hindustan Lever, down 0.93 per cent to Rs 127.80 also contributed to the weakness of the Sensex.

Meanwhile, Reliance Industries managed to ended marginally higher at Rs 434.95 with volumes of 37 lakh shares at the BSE. Tech pivotals Satyam Computer (down 4.95 per cent to Rs 286), Wipro (down 2.48 per cent to Rs 1,442.75) and Infosys Tech (down 2.19 per cent to Rs 4,996.20) slipped in the red as investors continued to sell in blue chip tech stocks for a possible investment in the forthcoming TCS IPO.

The overall mood of the market has been extremely cautious as investors are shying away from taking any fresh positions, said analysts.