This story is from April 13, 2006

Sensex slides 2.5% on profit-booking

TNN / Apr 13, 2006, 00:18 IST

Share

AA

Text Size

Small
Medium
Large

On Wednesday, sensex witnessed its biggest crash in two years of 565 points — to close 307 points down at 11,356.

MUMBAI: The wait is over. The big correction that everyone on Dalal Street was talking about till last week, has finally arrived. At least so it seems.
On Wednesday, sensex witnessed its biggest crash in two years �� since the May 17, 2004 ��Black Monday�� crash of 565 points �� to close 307 points down at 11,356. It was also the seventh biggest single-day fall in the history of sensex.Since coming tantalisingly close to the 12,000 level last Friday, sensex is now down nearly 600 points in just three sessions.
And while a lot of new investors now feel let down by this sudden reversal of the bull run, others have turned cautious. "Investors who had bought in the past two weeks on hope that the market will go up further, but lacked conviction, are sorely disappointed," said Manish Kanchan, CEO, Ambit Capital.
For nearly a year now, foreign broking houses and high-profile fund managers like Franklin Templeton��s Mark Mobius rated the Indian market as "overvalued." Mobius had said that the prices of Indian stocks were running ahead of their value, based on their profit growth.

Most experienced market hands expect the market to slip further, till all the euphoric gains of the past few weeks are shed fully and sensex reaches a realistic level again. There is even a consensus among fund managers and broking companies that a fall of 1000-1500 points may be "healthy" for the market in the long run.
On the other hand, investors who have been in the market for some time now have turned cautious, market players said. Fund managers are increasingly deferring their buying. "FIIs and MFs would now wait for the companies to come out with quarterly numbers and will invest only in those that exceed or atleast meet expectations," said the head of a local brokerage.

End of Article

FOLLOW US ON SOCIAL MEDIA