M A I N   N E W S

Stocks crash on rumours

MUMBAI, May 2 (PTI) — Rumour mongers had a field day on the stock markets today and brought down the benchmark BSE sensex by a whopping 285.33 points by spreading stories about mounting tension on the Indo-Pak border, among other things.

The National Stock Exchange shed 73.10 points, or 5.20 per cent. “There were rumours in the market. It’s unfortunate that the market is being driven by rumours, leading to mayhem,” NSE Managing Director Ravi Narain told PTI, adding that some interested parties had floated the rumours for personal gain.

The BSE sensex, which opened on a strong note at 4736.02 points, closed the day at 4344.51 after witnessing sudden selling across the board after the mid-session.

Even foreign institutional investors were not involved in regular buying, Bharat Dalal of Sanat and Dalal Securities Pvt Ltd said, adding that unless FIIs resorted to aggressive buying there was no hope of revival of the market sentiment.

Fears of the drought affecting the country’s economy added grist to the rumour mill, leading to downward revision in valuations of several companies, particularly those in agro-based industries.

“The fears of drought in the country have weaned the feel-good factor from the market,” Deven Choksi of K R Choksi Share and Securities Ltd said.

The recent decision of SEBI to expand the circuit filter also triggered panic selling in scrips, Choksi said, adding that redemption pressures on mutual funds for the last few days also led to selling of scrips.