The News International Team
The 50-share NSE Nifty saw consolidation on Wednesday ahead of expiry for September derivative contracts (on Thursday) though it continued fall for the second consecutive session. Supreme Court’s verdict on coal scam dragged the index as much as 67.5 points to hit an intraday low of 7950.05, but in late trade it showed smart recovery to manage to close above the 8000 level, down 15.15 points at 8002.40.
The 30-share BSE Sensex shed as much as 215.7 points intraday, before closing at 26744.69, down 31 points. Meanwhile, the broader markets continued to see huge selling pressure with the BSE Midcap and Smallcap indices falling 1.2 percent and 1.6 percent, respectively.
The ongoing correction is a healthy sign and the market needs to consolidate before resuming the bull run, said Nirmal Jain, Chairman, IIFL.
Jain feels the markets have been looking for reasons to correct and sees sharp corrections in midcaps and smallcaps. He said that one should be prepared for a 5-10 percent downside in the broader markets and 10-15 percent in midcaps.
Meanwhile, Supreme Court announced verdict on coal block allocation case. It cancelled 214 coal blocks, and exempted four blocks including allocations to Sasan UMPP and NTPC and SAIL.
The apex court gave six months time for government to make alternate arrangements. Attorney General said Rs 295 per tonne penalty was imposed on all cancelled block holders.
Jindal Steel and Power was the top loser in the Nifty, down 10 percent post coal verdict. JSPL’s penalty amounted to Rs 3,000 crore due to cancellation of coal blocks, said Rakesh Arora of Macquarie, adding the impact on Hindalco Industries will be minimal. The stock was down 0.5 percent.
Supreme Court added that the government is free to auction all cancelled blocks post March 2015, which may be beneficial to Coal India, the largest coal mining company. The stock was up 5 percent. Attorney General said Coal India will carry out mining activity till auctions held. Reliance Power too surged 5 percent post exemption for Sasan UMPP.
Shares of TCS, L&T, ICICI Bank, SBI, HDFC, Tata Motors, Tata Steel, Hero Motocorp, Bajaj Auto and BHEL were prominent losers, down 1-2.7 percent.
However, the buying in FMCG, healthcare, power and select technology stocks capped the downside. ITC, Infosys, HUL, ONGC, Cipla and Wipro gained 1-3 percent.
About 1019 shares advanced while 1946 shares declined on the Bombay Stock Exchange.