Mumbai: The sensex dived by another 3.13 per cent even as stocks staged a smart recovery on Friday (Feb 7, 2004) on the Stock Exchange, Mumbai (BSE) in the week under review.

The BSE Benchmark 30-share Index that extended its losses for the second consecutive week, witnessed wide fluctuations in a range between 5875.23 and 5551.61 before ending the week at 5667.51 as against last weekend's close of 5850.72, a net fall of 183.21 points.

The sustained slide on bourses was largely attributed to heavy sell-off by retailers who also squared up positions in view of expiry of February contract in Futures and Options segment on Thursday (Feb 26, 2004) as well as a dramatic slow down by Foreign Institutional Investors (FIIs) during the week.

The Government however warned market operators, including merchant bankers and some corporate houses, when the mega public offer by IBP received lukewarm response, raising suspicion that certain investment banks and corporates were engaged in price manipulation on bourses.

Market regulator Securities and Exchange Board of India placed the market under "high alert" and warned of strict action against those found guilty of manipulating the markets.

Generally, all-round sell-off by retailers and the fall in volumes was considered to be the consequence of the mega public offers. The Government is raising over Rs 15,000 crore from sale of its stakes in six companies including ONGC, GAIL, IBP, CMC, IPCL and Dredging Corporation of India.

According to brokers, the low volume is the reflection that liquidity in the secondary market has been adversely affected as a result of public offers.