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FIIs' Y2K fears, news of US continuing with sanctions affect sentiment; Sensex dips 75 points to 4630.06

Share prices suffered a major setback at the Bombay Stock Exchange, following speculative selling pressure from institutional investors and local operators, pushing the BSE Sensex down by 75 points today.

Discouraged by the continuous selling by foreign funds in the current month, the operators resorted to selling at the prime counters. A news report that the United States has threatened to go back on its earlier assurance of withdrawal of sanctions against India for conducting nuclear tests also aided the bearish phase, they said.

Reflecting the downtrend, the 30-share BSE Sensitive Index opened at 4721.61, higher from the previous close of 4705.13 points, touched the day's high of 4742.44 points, fell to touch the day's low of 4627.56 points, before closing at 4630.06 points, showing a net loss of 75.07 points or 1.59 per cent.

The broad-based BSE-100 index too dropped by 31.23 points to 2078.81 points as against the previous close of 2110.14 points.

Dealers said that the foreign institutional investors were the net sellers to the tune of Rs 2.73 billion during the period of August 2-18.

There were a few gainers noticed on the BSE while most of the counters declined on selling pressure.

Media reports indicated that foreign institutional investors were apprehensive that the Y2K issue -- popularly called the Millennium Bug that is expected to cause computer problems at the dawn of the New Year 2000 -- might affect emerging markets. So they are trimming their exposure to markets like India. Hence the sudden spurt in their selling, dealers said.

UNI

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