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Sensex closes below 26000 1st time since August 13

16:28

The News International Team

Sharp sell-off in European markets dragged the Indian equity benchmarks near two-month closing low in late trade on Thursday. The 30-share BSE Sensex closed below the 26000-mark for the first time since August 13, down 349.99 points or 1.33 percent to 25999.34 weighed down by broadbased selling.

The 50-share NSE Nifty moved closer to 7700 level intraday before closing at 7748.20, down 115.80 points or 1.47 percent led by unwinding pressure in major largecaps and fall in rupee.

Vibhav Kapoor of IL&FS feels that a further correction in the index is possible as the global situation is quite precarious and FIIs have been selling on the back of risk aversion towards emerging markets. “A deeper correction, if at all happens, would definitely be a good opportunity to add to your long positions,” Kapoor says.

He feels that in a worst case scenario, the Nifty could touch 7300-7400 levels if global markets weaken further.

However, according to him, the fall in crude oil and commodity prices do have a beneficial impact on Indian economy both in terms of current account and fiscal deficit. He adds that good macro data (inflation) and a favourable opinion poll for Assembly elections (held in Maharashtra and Haryana on October 15) are definite positives, which are giving strength to the market.

The broader markets too saw a big crack; the BSE Midcap and Smallcap indices lost 1.4 percent and 2.5 percent, respectively.

On the global front, European markets like France’s CAC, Germany’s DAX and Britain’s FTSE were down 1-3 percent (at 16 hours IST) on concerns over global growth and the stability of the Greek government. Asian markets closed lower with the Nikkei and Hang Seng falling over 2 percent and 1 percent, respectively.

Brent crude for November delivery contract, which expires today, declined 67 cents or 0.80 percent to USD 83.11 a barrel. It fell below the 83 a barrel level intraday, hitting the lowest mark since November 2010. US crude slipped USD 1.38 or 1.69 percent to USD 80.44 a barrel.

Back home, all sectoral indices closed in the red. BSE Power, Capital Goods, Oil & Gas, Auto, IT, Bank and Healthcare indices were down 1-3 percent while ITC, Gail India and Coal India were only gainers in the Sensex, up around a percent.

Hindalco Industries, Ultra Tech Cement, Grasim Industries, Mahindra and Mahindra, Sesa Sterlite, Tata Steel, Tata Power, Reliance Industries and BHEL topped the selling list, down 3-6 percent.

In the midcap space, GSFC, Crompton Greaves, Pennar Industries, Delta Corp, Federal Bank, Voltas, GMR Infrastructure, Apollo Tyres, Arvind, HFCL, Idea Cellular, Motherson Sumi, JP Power, Ashok Leyland, UCO Bank, Tata Motors DVR, Jain Irrigation and Alembic plunged 4-11 percent.

Meanwhile, in the first major shake-up of the bureaucracy, the Narendra Modi government transferred finance secretary Arvind Mayaram, replacing him with Rajiv Mehrishi, the chief secretary of Rajasthan, a state that has pushed dramatic free market reforms in recent months.

The market breadth was weak throughout the session. About 771 shares advanced while 2160 shares declined on the Bombay Stock Exchange while seix shares declined for every share advancing on the National Stock Exchange.

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