Chaos prevailed on the major bourses yesterday as the stock market gave a thumbs down to the credit policy. The BSE sensex closed below 4,000 points at 3,970.28, dropping 112.55 points from the previous close of 4,082.33. However, the NSE-50, which had slid sharply on Tuesday, gained 4.3 points in divergent trade to 1,151.10.
The broking community had expected a CRR cut as also an announcement linked to banks and FIs being allowed to take part in badla financing. With both not coming through, the market was disappointed.
The slide started immediately after the policy was announced, with bank scrips being the first to fall. The SBI scrip crashed to an intra-day low of Rs 284.90 before edging up to close at Rs 285.20, down Rs 10.60 from its previous close. This had an impact on the sensex, which crashed to the days low of 3,970.28.
Bank of India, Bank of Rajasthan, Bank of Baroda and the Global Trust Bank hit the lower end of the circuit filter on sustained selling pressure, edging up marginally towards the end of the trading session.
Heavy volumes were witnessed at these counters with BoB clocking a volume of 7.05 lakh shares, BoI 11.8 lakh shares and Global Trust Bank 2.27 lakh shares on the BSE. The BSE clocked a traded turnover of Rs 1,003.12 crore for the day while the corresponding figure on the NSE was Rs 1295.69 crore.
Reacting to the policy, Harshad Mehta said: The market was disappointed by the fact that banks and financial institutions were not given permission to take part in badla financing. This apart, there were also expectations of a CRR cut, which was again belied. However, there is no cause for alarm as the market is going through a consolidation phase. Only the players who had entered the market with a short-term perspective have moved out because of the correction being witnessed.
