Investors give mixed reaction to fall of Sensex by 3 percent

The Bombay Stock Exchange 30-share Sensex today fell by more than three percent during the inter day trading, in sync with other Asian markets and lingering credit worries in the United States.

Mumbai, Nov 12 : The Bombay Stock Exchange 30-share Sensex today fell by more than three percent during the inter day trading, in sync with other Asian markets and lingering credit worries in the United States.

The sensitive index partly recovered its losses and closed for the day at 18737, 170 points down from the previous close. Nifty closed at 5617, down 46 points. The NSE 50-share index touched an intra-day low of 5477 today.

Traders said there were worries about foreign portfolio inflows, which had driven the BSE index to a series of record highs in the last two months, could slow down because of souring appetite for risky equity.

Reliance Industries and ICICI Bank each fell more than four percent, leading the drop. The two stocks account for more than a quarter of the weightage in the main index.

At 11:01 a.m. (0531 GMT), the benchmark 30-share BSE index pared some of the losses and was down 2.33 percent or 439.69 points at 18,467.91, with 25 of the components falling. It had dropped as much as 3.03 percent in early deals.

The index had fallen 5.4 percent last week and is nearly 9 percent off a lifetime high of 20,238 hit on October 30.

"Now at 18,000-20,000 levels, 5-6 hundred points doesn't effect much because market is into a totally different category. So, persons who are long-term investors, they will not be panicked. The panic happens for the inter-day trading persons who take positions in derivatives and options," said Siddharth Kuanwala, a stock analyst.

Foreign inflows have slowed this month after the market regulator curbed the use of participatory notes used by unregistered foreigners to buy Indian shares, while the lingering credit worries in the United States have also weighed.

Most small investors are not sure of the course the market is going to take in the near future and hence might stay away from short-term investment.

"People should be careful. They should understand the market before entering and investing. Earlier it was heading northwards and now the share prices are falling. Layman cannot make out where the prices are going," said Rohit Kumar, an investor.

Cautious approach of the investors also attribute to the strong possibility of the debt-rating services downgrading hundreds of mortgage-related investments, creating the potential for more market unrest.

"I think this is a correction for the market that had scaled new heights in the recent past. I am sure it will fall by another 1000 points or so," said Rahul, another investor.

Top Sensex gainers today included NTPC, SBI, Cipla, Hindalco and Ambuja Cements, while losers included ONGC, Bharti Airtel, HDFC Bank, Infosys and Satyam.

ANI