Sensex in search of a new low?

THE SENSEX is past the fear of falling. The fear now is of hitting the floor. On Tuesday, the stock index closed below the psychologically important mark of 10,000 points.

THE SENSEX is past the fear of falling. The fear now is of hitting the floor. On Tuesday, the stock index closed below the psychologically important mark of 10,000 points.

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Taking the cue from markets plunging overnight in the US and early in the day in Asia, the Sensex closed with a loss of 256 points at 9,957. This is a 21 per cent fall from its lifetime peak of 12,612 points. On the NSE, the Nifty lost 79 points to close at 2,937.

Even FIIs — net buyers during the previous two trading sessions — turned net sellers, dumping Rs 212 crore of stock.

All the general indices lost by over 2.5 per cent, while Midcap and Smallcap indices slid by over 3 per cent.

As the falling indices pushed mutual-fund asset values down, many funds appeared to have been forced to offload stock to meet redemption pressure.

Anish Damania, business head (institutional equities), Emkay Share and Stock Brokers, said: “Domestic institutions have been net sellers over the past two days, when FIIs were net buyers. Redemption pressure seems to be building on mutual funds. But the market seems to have bottomed out -- there should be a reversal from here in a couple of days.”