The Hindu : Business : Sensex goes into a tailspin

Online edition of India's National Newspaper
Wednesday, Oct 19, 2005

Business

Business

Sensex goes into a tailspin

Heavy selling by hedge funds

MUMBAI: After a strong initial rally, the Sensex went into a tailspin and plunged by 195 points from its day's high on heavy sell-off by hedge funds triggered by sharp fall in rupee value against the U.S. dollar.

Initially, the Bombay Stock Exchange benchmark 30-share index (Sensex) had risen to the intra-day high of 8317.38 on heavy buying support on the back of FIIs' positive activity last weekend.

In highly volatile activity, the Sensex later took a 249-point swing on heavy sell-off by hedge funds alternated by buying at lower levels and fell to the day's low of 8067.91 before ending at 8122.25 against Monday's close of 8202.62, a net loss of 80.37 points.

In a knee-jerk reaction to the rupee fall, foreign funds, which reported net investments of Rs. 293 crore in cash on Friday, went on a selling spree following weakening rupee.

Reports that FIIs have made net sales on Monday also had adverse impact on the market.

Rupee at 11-month low

The rupee on Tuesday plunged to close at a 11-month low of 45.1650/1750 against the U.S. dollar on the interbank foreign exchange market here due to heavy dollar buying by banks.

— PTI

Printer friendly page
Send this article to Friends by E-Mail

Business