Friday, September 23, 2005

Sensex remains volatile, up by 35 pts in early trade

After the overnight mayhem, the Bombay Stock Exchange Benchmark 30-share Index (sensex) Friday made a strong turnaround after a firm start even as volatility had become order of the day on fairly good buying support from institutional investors.

The sensex opened remarkably higher at 8255.05 against Thursday's close of 8221.64 and later moved erratically in a range of 8327.35 and 8221.64 before being quoted at 8257.07 at 10.30 am, up by 35.43 points.

The market had crashed by a whopping 266 points or 3.13 per cent on panic selling triggered by raids on stocks brokers across the country by Income Tax authorities.

Fears of a probe into an unprecedented and rapid upsurge in stocks by the government and the financial market regulators also weighed heavily on the market sentiment.

Brokers said the market would remain volatile till the month end in view of the expiry of derivatives contract before which operators are likely to unwind long outstanding positions in the futures.

Foreign Institutional Investors (FIIs) were believed to be sellers in a number of counters.

FIIs reported inflows of Rs 731 crore in the first three days of the week.

Meanwhile, the stock exchanges have imposed hefty margins in several scrips and also reduced circuit breaker to 5 per cent in small-cap segments.

The market fundamentals are still strong and the sharp setback is considered as a necessary technical corrections, brokers added.

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