Spooked by exit polls

STOCKS REPORT

The market vote was largely negative on Tuesday over political concerns, with the Bombay Stock Exchange (BSE) Sensex recording one of its biggest single day fall.

The Sensex fell 213.30 points (3.6 per cent) to close at 5,712.28. The National Stock Exchange (NSE) Nifty lost 75.2 points to 1,817.25. Losers outpaced gainers 1418:296 on the BSE.

The fall was led by PSU and banking scrips, with most old economy counters taking a big hit. Says a dealer from a local brokerage, "Exit poll indications of the ruling government struggling to get a clear mandate in the general elections was taken negatively by the market, leading to the fall."

Market players said that worries over exit poll results after the close of the second round of voting on Monday which indicated that the ruling Bharatiya Janata Party-led coalition was still ahead of Congress, but could fall short of the numbers needed to form a government, created a negative environment, specially as market watchers were expecting them to win comfortably.

Rajesh Kamdar, dealer from a local brokerage, said, "The market has been betting on a step-up in economic reforms and divestment after elections, which the NDA was expected to win."

He adds that unwinding in the derivatives segment as expiry of near-month April 2004 derivatives contracts this Thursday draws near also attributed to the fall.

Cash market turnover on the BSE was at Rs 2,388.47 crore and on the NSE it was Rs 5,473.66 crore.

Vijay Saraf, chief operating officer, Centrum Securities, said, "PSU scrips were big losers today on fears that a reduced majority would mean the government could not proceed as quickly with reforms, which has been a big attraction for foreign funds."

RCF fell 9.5 per cent to Rs 46.50, MTNL lost 8 per cent to Rs 148.55, Shipping Corporation of India fell 9 per cent to Rs 132.70, BPCL fell 7 per cent to Rs 470.902, HPCL lost 6.7 per cent to Rs 477.35 and Indian Oil shed 4.5 per cent to Rs 539.40.

Lack of buying coupled with selling pressure across the board specially in automobile, cement, steel and power scrips led to the massive fall. Opening lower with a large gap of more than 75 points, the Sensex experienced sustained selling pressure.

Tata Steel was down 7.37 per cent to Rs 379.20, Tata Motors fell 7.27 per cent to Rs 480.55, L&T was down 7 per cent to Rs 579.50 and ACC was down 6.8 per cent to Rs 267.

Hindalco was down 6.4 per cent to Rs 1,215, Tata Power was down 6 per cent to Rs 388 and Reliance Industries fell 4.9 per cent to Rs 539.

Some buying was seen in pharma stocks with Cipla gaining 3.27 per cent to Rs 1,344 and Ranbaxy Laboratories was up 0.48 per cent to Rs 1,058.