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Sensex crashes by 228 points on the BSE
The Bombay Stock Exchange (BSE) sensex plummeted by 228 points 3417.89 during the week ended June 5 on the BSE, following large scale bull liquidation by operators and heavy off-loading by foreign institutional investors (FIIs) in the index based scrips on the BSE. Also marketmen, unhappy over the general budget proposals for not considering their long-time demand of introducing buy-back shares scheme turned into sellers. The FIIs pressed sales in the heavy weighted scripts in the fear of possible negative impact on the Indian economy by the trade sanctions. The Moody's sounding alarm on the country's rating and similar views expressed by Standard and Poor's rating agency also affected market sentiments badly towards the end of the week. Reflecting the bearish phase, the BSE sensex fell below the psychological barrier of 3500 to close at 3417.89 points against the previous week's close of 3686.39 points. BSE Vice-President Rajendra Banthia said the future trend of the market was entirely dependent on the FIIs actions. According to market sources, the sell-off was led by foreign funds like Jardine Fleming and Morgan Stanley. The sources further said that international rating agency Moody's investor services indicated that it would review India's country ceiling for foreign currency debt and bank deposits for a possible downgrade and this had a role in the sensex's plunge. On the opening day of the week, the market was looking for some market friendly announcements like buy-back scheme in the pre-budget session. The market displayed smart recovery during the pre-budget session but witnessed panic selling in the later session following disappointment of marketmen from the budget. The market continued to fall thereafter till the end of the week, despite continuous buying support by domestic institutional investors in blue chips.