Broadbased correction pulls down indices

After 2two days of sideways correction and consolidation, most traders were hopeful of further upward movement today. The global cues were strong this morning as US markets closed on a positive note yesterday and crude oil prices declined.

Markets opened on a positive note without disappointing the traders. Helped by steady quarterly earnings reported by Satyam and a better guidance for the rest of the year from the IT major, the indices held steady till late in the afternoon.

The decline in indices was sharp and sudden as it came after more than two hours of trading within a very narrow range. Not many of the frontline stocks survived the selling pressure and the indices lost well over half-a-per cent within minutes. Mild recovery during the last half-hour of trade helped the markets to recover part of the losses.

Sensex closed at 7304, down 39 points and the Nifty at 2231, down 11 points. Nifty July futures closed the day at the same level as the spot index.

Dabur, VSNL and Bharti were among the major gainers among Nifty stocks while Zee Tele, L&T and Tata Chemicals were the major losers.

Helped by some positive statements from the US Fed chairman on the health of the US economy and declining oil prices, the US markets closed the day on a positive note yesterday. The Fed chairman said that the conomic growth momentum was sustainable and inflation well contained.