Sensex winning run ends

Mumbai, Jan. 30: An incipient rally on the stock markets ' spread over the past six sessions ' snapped today as investors scooped up the gains on the table after markets stumbled globally, sending the Sensex tumbling 371 points and below the 17000 level.

The bellwether index closed at 16863.30, but market pundits said the correction had been anticipated as stocks had run up too quickly.

The Sensex has rallied nearly 12 per cent this month till January 27 and gained 3 per cent in just the past week. In the last six sessions, the index has put on almost 783 points, or 4.76 per cent.

The correction was initially triggered by the slide in key Asian indices, which tumbled into the red. Later, losses in Europe added to the bearish sentiment. Barring Taiwan, most of the major Asian markets fell up to 1.66 per cent. Equities in France, Germany and the UK were also trading weak.

With profit booking setting in, the Sensex, which opened at 17138.04, came under pressure throughout the trading session. It hit a low of 16828.33 and finished at 16863.30, with a loss of nearly 371 points. The 50-share Nifty fell 117.40 points below the 5100 mark to 5087.30.

Market experts welcomed the correction. "The correction is actually good as it would provide an opportunity to investors who were left behind in this rally. Investors should utilise this opportunity to pick value stock particularly from interest sensitive sectors as the next trigger is expected to come from the RBI in its next monetary policy, where we can expect it to cut the repo rate by 25 to 50 basis points," D.K. Aggarwal, chairman and managing director, SMC Investments and Advisors, said.

An important element of today's correction was the steep fall in capital goods stocks following the announcement of Bhel's results late last week. Bhel reported that orders worth Rs 5,850 crore had been cancelled during the quarter.

Moreover, Bhel's reported order inflows for the nine months ended December 31 at Rs 13,360 crore were far below the guidance of Rs 65,000 crore.

The disappointing picture on the order book front, led to brokerages either downgrading the stock or slashing their earnings estimates.

The Bhel scrip sank 10.41 per cent (Rs 28.50) to close at Rs 245.15. The impact was felt on its peers with Larsen and Toubro crumbling 5.37 per cent and the BSE capital goods index leading the list of percentage losers with a drop of 5.55 per cent.