Sensex tumbles over 200 points as rate sensitives, ADAG stocks drag

Though the frenzied selling in Indian stock markets may have stopped and the benchmark equity indices come off from the day’s lows hit in early noon trades, however sentiments continue to remain somber in Thursday afternoon session. After the four session gaining streak, the market participants exerted hefty selling pressure on the markets and dragged the frontline gauges even below the psychological 17,700 (Sensex) and 5,400 (Nifty) levels. Investors ruthlessly butchered the rate sensitive counters like Realty and Banking as Indian central bank after a major action last week took a cautious stance and abstained from resorting to liquidity easing measures in its policy review. Also the finance ministry’s economic survey failed to give any significant upside triggers to the markets, instead the survey cautioned that attention should to given to the asset price bubbles in the real estate and stock markets and the risks associated with these, which carry implications for the real economy. Though there appeared no sectoral gainers, some individual names like NTPC and HUL managed to keep their heads above the water and traded with good gains. Meanwhile, the spike up in bond yields too has not gone down well with market participants. The Indian bourses amid the volatility are underperforming their Asian counterparts which have recovered from early lows while European stock futures are indicating a flat opening for the markets there as investors awaited reports on American jobs and manufacturing.

Moreover, the broader markets too traded on a pessimistic note and succumbed to the selling pressure that was being exerted on their larger peers and plunged over a percent. The bourses dived on large volumes of over Rs 1 lakh crore while market breadth on BSE was in favor of declines in the ratio of 1791:785 while 121 scrips remained unchanged.

The BSE Sensex is currently trading at 17,678.63 down by 240.67 points or 1.34% after trading as high as 17,918.25 and as low as 17,623.22. There were 9 stocks advancing against 21 declines on the index.

The broader indices were trading on a negative note; the BSE Mid cap index plunged 1.26% and Small cap sank 1%.

On the BSE sectoral space there were no gainers, while Realty down 2.53%, Bankex down 2.51%, Consumer Durables down 2.30%, PSU down 1.95% and Capital Goods down 1.78% were the major losers in the space.

NTPC up 1.15%, Hindustan Unilever up 0.55%, Sun Pharma up 0.55%, GAIL India up 0.45% and Infosys up 0.28% were the major gainers on the Sensex, while DLF down 4.30%, Coal India down 3.06%, Sterlite down 2.69%, HDFC Bank down 2.67% and ONGC down 2.67% were the major losers in the index.

Meanwhile, days after slashing CRR by 75 basis points and infusing Rs 48,000 billion into Indian banking system, the Reserve Bank of India has gone on to keep the policy repo rate under the liquidity adjustment facility (LAF) unchanged at 8.5 percent. Consequently, the reverse repo rate under the LAF was left unmoved at 7.5 percent, and the marginal standing facility (MSF) rate and the Bank Rate at 9.5 percent.

Recent growth-inflation dynamics have prompted the Reserve Bank to indicate that no further tightening is required and that future actions will be towards lowering the rates. However, notwithstanding the deceleration in growth, inflation risks remain, which will influence both the timing and magnitude of future rate actions.

The S&P CNX Nifty is currently trading at 5,378.15, lower by 85.75 points or 1.57% after trading as high as 5,462.50 and as low as 5,367.00. There were 8 stocks advancing against 42 declines on the index.

The top gainers on the Nifty were NTPC up 1.07%, HUL up 0.64%, Sun Pharma up 0.57%, GAIL up 0.24% and Grasim up 0.21%.

DLF down 4.50%, R Com down 4.19%, IDFC down 3.76%, R Infra down 3.67% and R Power down 3.56% were the major losers on the index.

In the Asian space, Shanghai Composite slipped 0.73%, Straits Times eased 0.14%, Seoul Composite inched down 0.06% and Taiwan Weighted fell 0.04%.

On the other hand Hang Seng inched up 0.02%, Jakarta Composite rose 0.09%, KLSE Composite gained 0.01% and Nikkei 225 climbed 0.72%.