The News International Team
Equity benchmarks as well as broader markets shed more than a percent on Tuesday, tracking sharp fall in Chinese markets and further decline in crude oil prices. More profit booking by investors also triggered sell-off in the market.
The 30-share BSE Sensex closed below the psychological 28000-level, down 322.39 points to 27797.01, continuing for the third consecutive session today and hitting a one month low.
The 50-share NSE Nifty slipped way below the 8400-mark (support level, say experts), down 97.55 points to 8340.70. Meanwhile, the BSE Midcap and Smallcap indices shed 1.6 percent each on profit booking.
Experts feel the current fall may be extended by upto 5-6 percent but one should buy on every dip as they are bullish on market.
Sanjay Sinha of Citrus Advisors said the market should have consolidated much earlier. In the absence of a trigger for the bond market, which hinges on a rate cut by Reserve Bank, the market will remain in consolidation phase till third quarter numbers start coming out, he said.
If October-December quarter (Q3) results are better than the previous quarter, and if market sees a burst of liquidity, then it will find momentum which will loftily go ahead till Budget. Real correction, of around 10-15 percent, will happen after Budget, Sinha suggested.
Globally, Asian markets closed lower with the China’s Shanghai down 5.4 percent on profit taking amid expectations of weak GDP in 2015 and liquidity fears. Hang Seng lost 2.3 percent following slump on Wall Street last night while European markets like France’s CAC, Germany’s DAX and Britain’s FTSE dropped nearly one percent post Asian rout and further fall in crude oil prices.
Brent crude declined to fresh five-year low of 65.35 a barrel, before showing a recovery (around 15 hours IST) to 66.46 a barrel, up 27 cents.
Back home, all sectoral indices closed in the red. BSE Auto, Bank, Capital Goods, FMCG, Metal and Oil & Gas indices were down 1-3 percent while the fall in Healthcare and IT (down 0.2 percent) was less compared to other indices.
Sesa Sterlite was the biggest loser on the Sensex, down more than 5 percent on China woes. Other metals stocks like Tata Steel and Hindalco Industries were down 3 percent each.
State-run oil explorer ONGC shed over 4 percent to hit a 7-month low Rs 351 as Macquarie lowered target price for the stock to Rs 470 (from Rs 500), largely to factor-in the impact of lower crude price on ONGC Videsh (OVL is unaffected by subsidy, & contributes around 17 percent to ONGC’s earnings).
Macquarie downgraded Cairn India to neutral from outperform and also cut its target price by 19 percent to Rs 267 on fall in crude oil prices. The stock declined over a percent.
ITC declined 0.9 percent on account of profit booking as the stock rallied more than 9 percent from last week. Among others, L&T, Tata Motors, ICICI Bank, State Bank of India, Bharti Airtel, NTPC, Wipro, Tata Power and BHEL were down 1-4 percent.
However, Sun Pharma bucked the trend, rising 1.5 percent after the Competition Commission of India cleared Ranbaxy merger deal with some riders. CCI chairman Ashok Chawla said Sun Pharma and Ranbaxy must sell seven brands before deal closure. Ranbaxy gained 3.5 percent. In the pharma space, rival Dr Reddy’s Labs rose 1.5 percent.
Utility vehicle maker Mahindra and Mahindra remained in positive terrain throughout the session, up 1.2 percent after brokerage CLSA reiterated buy rating on the stock with a target price of Rs 1,550, citing favourable risk reward ratio.
In the broader space, Jet Airways gained another 6 percent (in addition to 10 percent rally in previous session) as the airline company may get more market share after its rival SpiceJet cancelled 1080 flights till December 31. SpiceJet rebounded 2.6 percent as former director Ajay Singh is confident that the promoter will be able to adequately fund the deficiencies.
Among others, India Cements, IFCI, PFC, HCL Infosystems, UCO Bank, Sintex Industries, Union Bank, Syndicate Bank, IVRCL, Apollo Tyres and Pipavav Defence plunged 4-6 percent while Sun Pharma Advanced Research, Amtek Auto, JM Financial, NCC, Opto circuits and Havells gained 3-4 percent.
Declining shares outnumbered advancing ones by a ratio of 2044 to 907 on the Bombay Stock Exchange while four shares slipped for every share gaining on the National Stock Exchange.