Mumbai: Stocks plunged for second successive day pulling the Sensex by another 118 points at close in a prolonged trading session on the Bombay Stock Exchange (BSE) today (Jan 16, 2004) on sustained sell-off by hedge funds as well as retailers.

The BSE Benchmark 30-share Index opened marginally higher at 6068.66 but later met with a strong resistance and dropped to the intra-day low at 5914.02 before ending at 5946.19 as against yesterday's close of 6063.91, a net fall of 117.72 points or 1.94 per cent.

The BSE authorities had extended the session till 16:45 hours (IST) in line with the National Stock Exchange (NSE)'s lengthy session which was extended due to a technical snag.

The sharp slide that was witnessed even as the Government announced a slew of measures to attract foreign investments, was seen by players as a necessary correction to an overheated market, saying that share prices had risen to dizzy heights in a sustained bull run for the past several sessions.

Attributing fresh retreat in stocks to sudden slowdown in FII activity, brokers said selling was triggered also by margin problem in cash and derivative segment on the NSE.

Foreign institutional investors (FIIs), which have pumped in heavy investments the first couple of weeks, made net investments of only Rs 152 crore in the initial three days.

Sell-off was partly because of the Government's step to defer a decision on raising the ceiling of foreign investments in the telecom sector, brokers said.

The Government yesterday liberalised FDI norms for banking and petroleum sectors and in scientific and technical journals.