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Profit booking drags Nifty below 8400, Sensex dn 130 pts

16:24

Market succumbed to profit taking in late trade after early consolidation; Nifty broke its crucial support level of 8,400 while Sensex too slid perilously close to the 28,000 mark.

Among bluechips, Tata Motors, Reliance, Sun Pharma, ONGC, ITC and SBI, retreated 3.2-7.4 percent on Nifty, contributing majorly to the benchmark’s fall. But 2.3-5 percent gains in HUL, HDFC, Dr Reddys Labs, HCL Tech and Larsen & Toubro limited the index’s fall in the red zone.

Heavyweight energy and metal stocks dragged Sensex and Nifty to 28,033 and 8,382 respectively. The weakness wasn’t limited to frontliners as mid-cap and small-cap stocks also took the slide downhill against the recent trend that saw broader market stay resilient during brief spells of weakness in the market.

From the oil & gas space, IOC, Gail India, Cairn India, Reliance Industries and ONGC closed 1.1-2.9 percent lower on NSE. The NSE index that tracks the stocks from the space – CNX Energy – ended 1.5 percent lower.

Metal stocks, too, were down, led by Tata Steel (down 3.4 percent), even as the government is expected to come out with draft rules that will lay out a roadmap for auction of cancelled coal mines. CNX Metal index scrapped almost 2 percent; Coal India, NMDC, SAIL, Tata Steel and JSW Steel lost 1.2-3.4 percent.

The sell-off was broad-based, only consumer stocks managed to eke out some gains. From the space, known names such as United Breweries, Britannia, United Spirits and HUL gained 0.1-2 percent.

Analysts make the case for consumer stocks which they said are expected to benefit going forward from the global fall in commodity prices as well as with the government efforts to roll out the goods and services tax gathering pace.

Consumer stocks, which are looking expensive on absolute valuation basis, must be looked at given the fact that they are expected to benefit from the global fall in commodity prices, Dipen Sheth of HDFC Securities told in an interview to CNBC-TV18.

Sugar stocks after rallying for two days on hopes of potential government subsidy for exporting sugar, too came under selling pressure in the fag end of the trading session. Sector bigwigs such as Balrampur Chini and Bajaj Hindusthan retreated 2-3 percent.

Telecom stocks remained in focus on Wednesday as Department of Telecom (DoT) has decided to split the 2G and 3G/4G auction. This is a negative development compared to Telecom Regulatory Authority of India (TRAI) recommendations, which was to auction all the spectrum simultaneously. Idea, Tata Comm and Reliance communication lost 0.7-4.7 percent even as marginal gains in sector heavyweight Bharti Airtel limited the loss.

Shares of Info Edge closed 1 percent higher after hitting a new high intra-day high of Rs 1014.70 on Wednesday. Investors celebrated as Info Edge decided to infuse an additional investment of about Rs 185 crore in the shares of Zomato Media. Info Edge will be investing along with two other investors in this round of funding, which aggregates to Rs 370 crore and includes purchase of shares from certain existing shareholders.

Eicher stock too hit a lifetime high of Rs 14,960 today. The stocks witnessed a slew of upgrades post September quarter after management further raised its production guidance. The marketcap of the company now stands at Rs 39,800cr. The stock has rallied 200 percent this year.

Globally, Europe and Asia remained weak on Wednesday. The dollar rose to its seven-year high levels against the yen. Oil prices remained depressed to near 4-year lows at USD 78.5 a barrel.

Rupee weakened past 61.95 per dollar to hit multi-month lows.

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