Shock wave continues, Sensex down 91 pts

Selling pressure in frontline counters dragged the market down for the second straight day on Thursday. On an extremely volatile trading day, the benchmark Bombay Stock Exchange (BSE) Sensex continued to reel under worries that hikes in US interest rates might lead to a drying up of global fund flows into India.

The Sensex hit a high of 6,481.23 and a low of 6,324.53 in intra-day trades. The Sensex finally closed at 6,367.39, down 91.45 points (1.42 per cent) from yesterday's close.

Thursday's story on the bourses was dominated by slowing Chinese demand for metals. Metal stocks were among the biggest losers. Tata Steel was the biggest loser in the Sensex basket, down 3.61 per cent to close at Rs 355.40, while Hindalco lost 2.79 per cent to close at Rs 1,328.85.

Interest rate concerns weighed down banking stocks. The State Bank of India scrip was down 2.09 per cent to Rs 604.60, ICICI Bank was down 1.82 per cent to Rs 354.15 and HDFC Bank closed 2.64 per cent lower at Rs 485.35.

The markets extended yesterday's losses, as buying interest was limited to bargain hunting in shares that have been battered in the past two days.

Hero Honda, which was the biggest loser on Wednesday, gained 1.63 per cent to Rs 575.25, followed by Reliance Energy, which gained 0.96 per cent to Rs 545.25. Renewed buying interest in the Bharti Tele-Ventures scrip pulled it up 0.38 per cent to Rs 211 and Hindustan Petroleum Corporation Ltd gained 0.09 per cent to Rs 392.60.

Mid-cap stocks came under sustained selling pressure, though some bargain hunting in blue-chips lifted the market into positive territory for a brief period in afternoon trading. However, selling pressure at all higher levels dragged it back into losses.

Market watchers said though the fundamentals remained intact, players were booking profits and unwinding overbought positions.

The breadth of the market was extremely negative, with losers outpacing gainers 12:5. In the Sensex basket, 26 of the 30 scrips closed lower. As many as 388 stocks have plumbed one-month lows in the last three days.

Foreign funds were net sellers of Indian shares worth Rs 58 crore on Wednesday, while domestic mutual funds were net buyers to the tune of Rs 73 crore, data released by the Securities and Exchange Board of India show.

The trade volume on the BSE was lower than yesterday in the cash segment. The bourse reported a turnover of Rs 2,671.97 crore and the National Stock Exchange Rs 6,090 crore.