Relentless bear onslaught triggered a sell-off on the bourses, with the key benchmark indices diving to 7-month lows. The sentiment was hit by media reports of a possible probe into two new cases involving the allocation of telecoms spectrum. Mounting concerns about slowing corporate profits and fears of further monetary tightening to tame high inflation, also kept investors away.
From its close of 20509.09 on 31 December 2010, the BSE Sensex has tumbled 2733.39 points or 13.32% in 2011 so far. The BSE Mid-Cap index has slumped 16.21% and the BSE Small-Cap index has lost 17.32% in 2011.
Meanwhile, media reports on Tuesday said the government is probing two new cases involving the allocation of telecoms spectrum, increasing the pressure on the government already hit by a telecoms graft scandal. The Indian Space Research Organisation (ISRO), overseen by the ministry of space, is reportedly being probed by the government auditor for a 2005 allocation of mobile internet spectrum without a proper bidding process that may have cost the exchequer up to Rs 2 trillion ($44.2 billion). The Government is also reportedly probing whether state-run telecom firm Bharat Sanchar Nigam (BSNL) appointed franchises for broadband wireless access without charging any upfront payment. BSNL had appointed franchises on a revenue-share basis, even after paying Rs 8000 crore ($1.77 billion).
The BSE 30-share Sensex was down 261.49 points or 1.45% to 17,775.70, its lowest closing level since 8 July 2010. The Sensex lost 295.01 points at the day's low of 17,742.18 in late trade. The index gained 104.32 points at the day's high of 18,141.51 in early trade. The S&P CNX Nifty was down 83.45 points or 1.55% to 5,312.55, its lowest level since 8 July 2010. The Nifty hit a low of 5,303.40 in late trade. The BSE Mid-Cap index fell 2.42% and the BSE Small-Cap index declined 3.23%. Both these indices underperformed the Sensex.
The total turnover on BSE amounted to Rs 2793 crore lower than Rs 2823.33 crore on Monday, 7 February 2011.
The market breadth was weak. On BSE, 2368 shares declined while 540 shares rose. A total of 80 shares remained unchanged. Among the 30-member Sensex pack, 25 declined while the rest advanced.
VIEWS FROM DIFFERENT BROKING HOUSES::
FORTUNE FINANCIAL (ABHIJIT CHAKRABORTY): “I think there is downside in the market. Fundamentally, I would say the market should bottom out somewhere around 13.5-14 times its FY12 estimated earnings. So, that way on the Nifty, we are looking at anything between 5,150-5,200 levels and about 17,500 on Sensex. At those levels, it would be an attractive buying opportunity for the market as a whole”.
ANGEL BROKING (MILEEN VASUDEO): “Markets were unable to sustain the opening positive move and selling gradually picked up momentum which dragged the indices to close deep in red. On the daily chart, we are witnessing that indices have closed below the multiple support levels of 17,820/5,350 which suggests weakness. In coming trading session if indices trade convincingly below 17,740/5,300 levels then they are likely to test 17,600-17,374/5,250-5,200 levels. On the upside, 18,000-18,150/5,400-5,450 levels may act resistance for the day”.
BONANZA PORTFOLIO (AVINASH GUPTA): “The structure of the market has weakened considerably. The market is expected to trade with a soft bias for some time”.
GABA FINANCIAL ADVISOR (PRAKASH GABA): “Nifty may find support at 5260-5240”.
KARVY STOCK: “The market will take cues from the global markets and is expected to open on a flat to positive note tomorrow. Traders are advised to trade short from current levels, else from 5350 levels for targets of 5200 levels”.
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