Indices decline on FII inflow worries

12 August 2005

Indices were unable to sustain the rally from the last two days on worries about FII inflows. The news that FII's were net sellers on Wednesday when the frontline indices surged close to 2 per cent each was enough to make traders worry.

Markets opened on a strong note, helped by a positive closing by the US markets yesterday and firm Asian markets. Sensex surged ahead and posted a new lifetime high of 7861 in early trades.

The strength did not last long and the indices started a steady decline, which lasted for the rest of the day. A brief attempt at recovery later in the afternoon also did not last and the indices closed the day almost at the day's lows.

Sensex closed at 7767, a loss of 49 points, and the Nifty at 2362, a loss of 19 points. Nifty August futures closed the day almost at the same levels as the spot index.

Hero Honda, Dabur and Ranbaxy were among the major gainers among Nifty stocks while Zee Tele, SAIL and VSNL were the major losers.

US markets rallied yesterday as record crude prices lifted oil stocks. The Dow closed with gains of close to a per cent while the S&P 500 and the NASDAQ gained three-quarters-of-a per cent each.