Rollover worries pull Sensex down 185 points

BENCHMARK indices shed more than 1% on Wednesday, a day ahead of the derivative contracts expiry, as it is widely felt that most traders holding long positions are not keen to roll them forward to the next series. Lack of positive triggers — both at the local and international level — is keeping bulls on the backfoot, say brokers. Adding to the gloomy outlook, the 50-share Nifty slipped below the psychological 4,300-mark to close at 4,292.10, down 45 points over its earlier close. The 30-share Sensex fell 185.43 points to end the day at 14,296.79, down 1.3% over its previous close. Equities started off on a firm note, but were unable to hold on to their initial gains due to the indifferent trend in key Asian markets. Geopolitical tensions because of Russia’s aggressive stance over Georgia, and continuing worries over the subprime crisis kept investors in world markets jittery. Crude prices inching up towards the $120 per dollar mark, and record high inflation in South Africa completed the gloomy picture. Back home, investors were cautious ahead of the inflation data and GDP report to be announced in a couple of days. The finance minister is confident that the economy will log 8-9% growth in the current fiscal, but not many share his optimism. Analysts expect the market to be volatile on Thursday because of the current month derivatives contracts expiry. “We expect Nifty to find support at 4,200 and probably go to 4,600 within a month,” said Vinit Birla, technical analyst at Pranav Securities. The rupee strengthened 0.2% to 43.75 a dollar, but investors continue to be cautious. Of the 30 Sensex stocks, 26 ended in the red. Hindalco, Tata Steel, Infosys and Mahindra & Mahindra were among the handful of gainers. Overall, three shares fell for every two that rose. Overall trading volumes were muted, with both exchanges together clocking over Rs 60,000 crore worth of turnover. This is a low figure on the previous day of the derivatives expiry. Among sectoral trends, all the BSE sectoral indices ended in the red, with BSE Bankex and BSE Reality faring the worst. The rate-sensitive indices plunged 3.5% and 2.2% respectively. Global credit rating agency Moody’s expects RBI to further tighten monetary policy by way of rate hikes, to contain inflation. The government will unveil weekly inflation data after trading hours tomorrow.