The BSE SME index dropped to 776.41 points on Friday, a fall of 8.59 points over Thursday’s close. The drop in the BSE SME index synchronized with the fall 208 point drop in the sensitive index on the back of a institutional selling.
The selling was also partly triggered by the statements attributed to the Reserve Bank of India, expecting a 25 basis points increase in the U S interest rates after the Fed Reserve meeting next week.
But at Friday’s trading, the largest traded stock was Dhanuka Commercial a trading entity. A total of 4.2 lakh shares of the script changed hands, though the price of the scrip dropped 5 paisa to close at Rs 6.45. But in terms of turnover realty entity Sun star Realty and VCU Data management topped the charts. Only 3.15 lakh and 2.91 lakh of the two entities changed hands. But turnover remained high due to the high prices. SRDL closed at Rs 28.30 a drop Rs 2.25 over Thursday’s close and VCU remained flat at Rs 26.
The market sentiments were dampened by further fall in international petroleum prices. A fall in international petroleum prices, while good for the macro-economic fundamentals are not necessarily good for stock markets. This is in view of the large presence of West Asia based sovereign funds that have deployed some of their surpluses in the domestic stock markets. Falling oil prices have stripped the entities of their surpluses. Oil prices are presently at just about $36 a barrel and the International Energy agency has forecast a drop below $30 a barrel.
That in turn would mean that more of the west Asia sovereign funds would begin pulling out of their investments in the stock markets, particularly from the high risk emerging markets, including India. Among the sovereign funds investing in Indian equity markets directly or indirectly include, funds domiciled out of the Saudi Arabia, Qatar and the United Arab Emirates. But the pullout means that some of the domestic funds are likely to step into the market during the course of the next week after prices touch the 52 week low points, marketmen said. Consequently a correction was expected.
Image Courtesy : Hindustan Times
