Volatility rules, Sensex dives 2%

STOCK REPORT

In yet another day of volatility, which has marred all sessions in the last fortnight, key indices declined sharply on Monday. The indices opened firm, but later succumbed to selling pressure.

The 30-share Bombay Stock Exchange Sensex closed at 10213.48, down 237.85 points, or 2.3 per cent, after touching a high of 10552.38 and a low of 10186.33.

The National Stock Exchange's 50-share Nifty closed at 3016.65, down 74.70 points, or 2.4 per cent, after touching a high of 3125.40 and a low of 3006.40.

Volatility, like in the last few sessions, continued to rule the market as indices swayed between the negative and the positive territories. Dealers said investors sold either to book profits or to cut losses.

"The indices were kept under pressure throughout the day by investors waiting to exit the market at an opportune time," a dealer at a domestic brokerage said.

Market breadth was overwhelmingly negative, as there were only four gainers in Sensex and nine in Nifty.

Shares of fast moving consumer goods companies provided some relief to bulls in the first hour of the session, but could not sustain the gains.

"Monday's market movement was a continuation of what has been happening in the last few sessions. A few days of gains is being followed by a fall and vice-versa," said Praveen Mallik, head of operations, KC Securities. "The Sensex has been moving in the 10,000-10,500 range and is close to bottoming out," he said.

Shares of technology companies too, which have been among the rare gainers in the last few sessions, failed to go against the market trend. The CNX IT Index fell 2.2 per cent to 3793.70.

"IT shares have been rising for last few sessions because of the strengthening U.S. dollar against the Indian rupee," said a dealer with a domestic brokerage.