The markets caved in to selling pressure towards the close of trade due to possible unwinding pressures on the last day of the November derivatives series. The Sensex ended at 19318, lower by 141 points and the Nifty ended at 5799, down 66 points.
The indices had begun the day on a steady-to-positive note after being jolted on the previous evening by the CBI's damning revelations of how some big PSU banking officials had colluded with Mumbai-based private company, Money Matters to sanction loans to certain realty players. In the process, the overall markets chose to ignore the inevitable hammering in select pockets such as banking and realty.
CBI had alleged that officers of top management and middle management of various public sector banks and financial institutions viz. Bank of India, Central Bank of India, Punjab National Bank, LIC and LIC Housing Finance were receiving illegal gratifications from the private financial services company who were acting as mediators and facilitators for corporate loans and other facilities from financial institutions. Searches were conducted at various
locations in Mumbai, Delhi, Chennai, Jaipur, Kolkata and Jalandhar.
The reason for the momentary return of normalcy was the rally on Wall Street and the rub-on effect across the Asian markets.
The US indices had rallied overnight as stock investors put aside worries about swirling global problems, turning to an improvement in the labour market and signs that consumers are ready to open their wallets ahead of the biggest shopping day of the year.
And Asian stocks took it from there, bouncing back from 1/2-month lows, with buying focused in the technology and retail sectors on hopes for a busy US shopping season.
Major European stock markets are also showing robust gains of 1-2% each in mid-day trades.
As the day wore out, the banking sector actually saw buying interest at lower levels. The realty space remained in doldrums though.
