As bull liquidate positions, Sensex crashes 81 points
Mumbai—The introduction of compulsory rolling settlements prompted large offerings by bulls in forward shares on Friday, the last day of settlement at the Bombay Stock Exchange.

Along with the rolling settlements, the exchanges are introducing options trading in 30-odd actively traded scrips.

Foreign institutional investors also started selling, as a result of which many blue chips fell. Market sources said that US-based funds like Janus, Capital and Alliance pressed sales in counters like Reliance, Infosys, Satyam, Digital Equipments, Sterlite Optical Fibre and Wipro.

Following this the 30-stock BSE sensitive index crashed 81 points or 2.3 per cent to 3,373 -- the lowest in past two months.

The ET's convergence index, Mindex, too plunged 107 points to 1,751.

Reports of sustained weaknesses in developed markets like US, UK and Hong Kong further affected sentiments.

Scrips like Digital Equipments, Wipro, ACC, Larsen & Toubro and Silverline witnessed sizeable bull liquidation on BSE ahead of its annual book closures for dividend payments.

Traders opted to liquidate a sizeable portion of long positions towards the end of carry-forward system in some 170 scrips.

According to Sebi’s earlier announcement, any long positions entered into after May 14 will have to be compulsorily liquidated before July 2.

Most traders fear a substantial fall in volumes on introduction of rolling settlements.

In Friday's trading, Reliance Industries’ scrip (RIL) dropped by Rs 6 to Rs 357.65. This was on the day of its annual general meeting when chairman of the company, Dhirubhai Ambani announced that the company has performed well in the first quarter of 2001-02 and also that RIL's profits will increase by about Rs 1,000 crore on account of consolidation of Reliance Petroleum's financials in the current year.
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Wall Street; Bad news stirs hopes of rate hike
New York—Even as grim profit forecasts issued forth from Nortel Networks and JDS Uniphase, stocks stayed close to the break-even point at midday on Friday.

Wall Street clung to the hope the Federal Reserve would fire off a bigger-than-expected interest-rate cut.

In afternoon trading, the Nasdaq Composite Index inched down 13.52 points, or 0.66 per cent, to 2,030.55, after losing more than 2 per cent earlier and swayed briefly on positive ground.

The Dow Jones Industrial Average lost 18 points, or 0.17 per cent, to 10,671.75, after falling more than 1 per cent earlier in the day. The Standard & Poor's 500 Index fell 2.11 points, or 0.17 per cent, to 1,217.76.

Nortel, the world's largest supplier of telecommunications gear, dropped $1.31 to $9.29 and JDS, the world's largest fiber-optic parts supplier, sank $1.59 to $12.22 helping push the Nasdaq below the key 2,000-mark earlier in the session.

Software giant Microsoft Corp. also rocked by rumors that it could issue a profit warning, dropped 90 cents to $68, recovering a bit from earlier losses. A spokesman said the company does not comment on rumors or speculation.

Dow component General Electric Co. rose 1 cent to $48.87, while Honeywell International Corp, also a Dow stock, added 24 cents to $37.34. GE made a final offer of concessions to the European Commission, knowing its remedies fell far short of requirements set by the Commission to clear its planned merger with Honeywell.

McDonald's Corp, the largest restaurant company in the world, fell $1.01 to $28.95.

Consumer products company Procter & Gamble Co. dropped $2.06 to $62.80. The Dow component said earnings in the current quarter and next fiscal year would be in line with current estimates, but growth will still be below long-term goals as its baby care, feminine care and western European businesses lag.

Weak economic data early in the day spurred hopes the Fed would come to the rescue with a deep rate cut.
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