Sensex closes below 9,000
After surging by 324.41 points initially, the stock markets plunged to 8,929.44.india Updated: Jun 14, 2006 20:01 IST
A strong possibility of US Fed rate hike continued to cause alarm worldwide, taking a heavy toll on the country's stock markets, which on Wednesday plunged by another 133 points to end at 8,929.44 as investors resorted to frenzied selling.
The market situation worsened further with a slowdown in inflows by Foreign Institutional Investors (FIIs) and mutual funds facing a cash crunch due to heavy redemption pressure.
Initially, the Bombay Stock Exchange (BSE) 30-share sensitive index (Sensex) zoomed by 324.41 points to the intra-day high of 9,387.06 -- in line with a firm trend in Asian markets -- despite lack of investors' support.
But the markets later turned extremely erratic and the Sensex fell sharply after the midsession on heavy sell-off touching the day's low of 8,799.01, a big swing of 588 points before ending the day at 8,929.44, a net fall of 133.21 points or 1.47 per cent.
The Sensex has fallen by 881 points or 8.98 per cent during the three-day slide.
The National Stock Exchange's (NSE) S&P CNX Nifty too fell by 30.50 points or 1.15 per cent to 2,632.80 from last close of 2,663.30.
Domestic mutual funds, which maintained relatively low profile during early trading, later pressed the sale button in a bid to raise funds to meet increasing redemption pressure, mainly from corporates, market players said.
Mutual funds have been consistent sellers in the month and have made heavy withdrawals of Rs 1,421 crore so far.