Sensex plunges by 324 points, banking, consumer goods hit

Mumbai, May 21 (PTI) Vanquishing the euphoria over a
stable UPA government, weak global cues and profit-booking
brought the Indian benchmark Sensex on BSE down by over hefty
320 points Thursday amid worries that the market will be
volatile and may test the lower end in the coming days.

Led by fall in banking and capital goods shares, the 30-
share index on the Bombay Stock Exchange closed below
psychologically important 14K-level at 13,736.54, lower by
324.12 points, or 2.31 per cent.

The National Stock Exchange's 50-share Nifty dropped by
59.40 points, or 1.39 per cent, to close at 4,210.90.

Marketmen said a sharp fall in European markets adversely
impacted the market in late afternoon trade. European bourses
were down 1.70 per cent to 2.36 per cent in early trade.

"It was correction induced by profit-booking," said
Bonanza Portfolio Assistant Vice President Avinash Gupta,
adding that going forward the market is expected to be
volatile and may test the lower end.

Stocks of oil companies escaped the selling pressure
while banking and capital goods shares were battered.

"In Thursday's market, the exception was the oil sector
PSU's. This was on account of appreciation that the there
could be deregulation of oil and petroleum products. This
could reduce subsidy burden enabling companies to generate
resources to pursue the growth," Gupta said.

ONGC, BPCL, IOC and HPCL notched up smart gains in the
range of 8-15 per cent.

Inflation rising to 0.61 per cent for the week ended May
9 from 0.48 per cent in the previous week also added to
selling pressure.

According to provisional figures on NSE, FIIs sold shares
worth Rs 985.53 crore in equities as on May 20.

Engineering giant L&T fell by a sharp 8.59 per cent while
Maruti Suzuki declined 6.93 per cent.

Among other major losers, India's largest private sector
lender ICICI Bank was down 5.15 per cent, HDFC 5.01 per cent,
Hindalco 5.00 per cent, Wipro 4.86 per cent, TCS 4.25 per cent
Mah & Mah 3.75 per cent and BHEL 3.73 per cent.

However, Reliance Comm spurted 4.52 per cent, Ranbaxy
2.66 per cent, NTPC 1.87 per cent and Rel Infra 1.36 per cent.

Barring PSU, oil & gas and consumer durable indices, all
others closed in the red. The BSE PSU index gained 2.75 per
cent as key components ONGC rose by 8.41 per cent, HPCL 14.64
per cent, MMTC 15.08 per cent and BPCL 10.22 per cent.

Brokers said maket participants anticipate the new
government to pursue disinvestments of state-run undertakings,
leading buying interest in shares of state-run companies.

The business volume dropped to Rs 7.996.10 crore from Rs
8,415.09 crore on Tuesday. Housing Development and
Infrastructure Ltd (HDIL) Thursday recorded the highest
turnover of Rs 277.96 crore followed by ICICI Bank (Rs 242.20
crore).

The market breadth was extremely bullish with 2,097
gainers as the small cap stocks witnessed a sharp rally. PTI