The Hindu : Business : Sensex crashes 461 points

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Friday, Jun 09, 2006

Business

Business

Sensex crashes 461 points

Domestic MFs start offloading under redemption pressure

MUMBAI: Weak global markets continued to hound the Bombay Stock Exchange benchmark Sensex, which crashed by a steep 460.95 points amid selling by mutual funds due to redemption pressure.

With Thursday's fall, the index has lost a huge 1155.52 points or 11.06 per cent in the last four trading sessions.

The BSE-30 share index opened sharply lower at 9664.90 and plunged to the day's low of 9200.80, but closed at 9295.81, down 4.72 per cent.

Looking back, the Sensex, which had closed at 9397.93 on December 30, 2005, skyrocketed to touch historic intra-day high of 12671.11 on May 11, 2006. Later, it continued to reel under heavy selling pressure from foreign institutional investors that forced operators and retail investors to sell their holdings at any price.

Slowing U.S. economic growth might result in interest rate rise amid continuous depreciation in value of Indian rupee worried foreign investors and they preferred to keep a low profile on the buying side.

The situation was further aggravated when local mutual funds started offloading after facing redemption pressure as they were net sellers for the past three sessions since June 2.

Nifty tumbles

On the National Stock Exchange, the S&P CNX Nifty tumbled by 145.85 points or 4.76 per cent to 2724.60.

Selling was not confined to any particular segment as all sectoral indices plunged by over 3-8 per cent and all 30 index-based counters finished with sharp to moderate losses. The broad-based BSE-100 index moved down by another 259.95 points to 4721.64.

— PTI

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