Sensex drops 51 points in volatile trading

MUMBAI, FEB. 26. The market ran out of steam after early sharp rebound and crumbled by over 156 points from the day's high in volatile activity on the Bombay Stock Exchange today due to late onslaught by foreign institutional investors and retailers on the last day of derivatives contract.

Starting on a firm footing at 5639.83, the BSE benchmark 30-share index rallied sharply to the intra-day high of 5723.31 on hectic purchases by domestic financial institutions during the first half of the session. However, the BSE barometer crashed after 2 p.m. on widespread selling reportedly by a couple of big corporate groups as well as FIIs, to end the session at 5567.12 against yesterday's close of 5618, netting a fall of 51.03 points.

Crediting early firmness to the reported warning by the Union Disinvestment Minister, Arun Shourie, yesterday to stock market operators, including merchant bankers, against manipulation of share prices, brokers said sell-off by vested interests was so intensive that support by domestic institutions failed to salvage adverse effect on the market. Meanwhile, the response to the IBP public offering improved considerably after the Government's tough statement on price manipulation on bourses, having received bids for over 22 lakh shares against a meagre 15,600 during the first three days.

Retailers seemed to be unwinding long positions at the expiry of February contract in the Futures and Options. The FIIs, who have been net sellers in the first two days, also were believed to have sold in reaction to the negative development.The broad-based BSE-100 index eased by 15.39 points to 2869.73. In the specified group, 118 including 21 index-based counters registered sharp to moderate losses while 73 others closed with gains.