Stocks retreat after early firmness

MUMBAI, APRIL 19. Old economy stocks retreated after initial firmness and ended substantially lower, pulling down the Sensex by 61 points at close on the Bombay Stock Exchange today on fairly heavy selling by domestic mutual funds and foreign institutional investors.

The BSE benchmark 30-share index that initially had risen to the intra-day high of 5895.17, later reacted negatively and dipped to the day's low at 5782.37 before ending at 5800.54 against last Saturday's close of 5861.63, a net fall of 61.09 points or 1.04 per cent.

Attributing the early upsurge to fresh purchases by local funds, brokers said the negative activity by FIIs that have been consistent net buyers in the past several weeks forced domestic mutual funds to book profits at higher price levels.

The FIIs were believed to be heavy sellers in old economy heavyweights such as BHEL, RIL, SBI, Tata Motors, Infosys Technologies, Satyam Computer, Grasim, GACL, L&T and Bajaj Auto.

Investors seemed to be cautious and were not willing to make any commitments in view of the Lok Sabha polls.

Though the market is expected to remain cautious for the next three to four weeks, it is likely to witness a sharp rally once the new government is put in place, brokers added.

The broad-based BSE-100 dropped by 37.05 points to 3104.42. However, bank shares attracted brisk activity and scored impressive gains on sustained buying support from domestic institutions. ICICI Bank, HDFC Bank, Andhra Bank, Corporation Bank, and Union Bank were among prominent gainers.


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