The News International Team
It was a terrible Thursday on Dalal Street. The market saw immense selling pressure with the Nifty closing expiry below 8350-mark and the Sensex shedding 727 points intraday on geopolitical tensions. Banking & financials and technology stocks led the massive fall.
The 30-share BSE Sensex tanked 654.25 points or 2.33 percent to 27457.58 and the 50-share NSE Nifty dropped 188.65 points or 2.21 percent to 8342.15.
The market had hit a record high in the beginning of March series, but failed to sustain that momentum through the series. The Nifty and Sensex corrected 8.5 percent from their all-time highs of 9119.20 and 30024.74 hit on March 4.
Experts see some more correction ahead as they feel earnings are likely to disappoint in next two quarters at least. RBI policy and earnings will be the key triggers in April series, they said.
Dharmesh Mehta of Axis Capital said the correction was on expected lines as market was running ahead of itself while Anup Maheshwari of DSP Blackrock said earnings, which have been disappointing in last few quarters, are unlikely to see any improvement in Q4 earnings as well. He sees correction on cards.
Global markets too saw sell off today with the European markets trading 1-1.5 percent lower (at 16 hours IST) post decline in the US and conflict in Yement. In Asian, Nikkei and Kopsi dropped 1 percent each.
Oil prices surged more than 5 percent intraday as Saudi Arabia launched military strikes to counter Houthi militia which aimed to topple the Yemen government. The operation involved 10 countries including several gulf nations. NYMEX crude rallied 4 percent to USD 51.20 a barrel and Brent crude gained 3.8 percent at USD 58.62 a barrel.
Back home, the rupee also traded at a one week low due to consistent dollar demand seen from large petroleum companies.
The broader markets too saw selling pressure with the BSE Midcap and Smallcap indices falling 0.8 percent and 1 percent, respectively. Declining shares outnumbered advancing ones by a ratio of 1804 to 1005 on the BSE.
BSE IT and Bankex plunged more than 2.5 percent followed by Auto, Metal, Oil, FMCG and Realty with 1-2 percent loss.
Housing finance company HDFC and software services exporter Infosys were the real culprits behind today’s selling pressure, down 5.3 percent and 3.3 percent, respectively.
Shares of HDFC Bank, ICICI Bank, TCS, Tata Motors, SBI, Axis Bank, Sun Pharma, Wipro, HUL and Sesa Sterlite were other prominent losers, down 2-4 percent.
However, telecom stocks bucked the trend as spectrum auctions concluded yesterday post 19 days and 115 rounds of bidding. The provisional amount committed by bidders stood at over Rs 1.09 lakh crore. Kotak remained positive on Bharti Airtel and Idea Cellular that gained 1 percent and 4 percent, respectively.
Power companies with gas-based power plants also rallied in trade today, a day after the government approved import of LNG for stranded gas based power plants. Piyush Goyal said the move was essentially to provide some stability in the power supply to the national grid. Torrent Power and Lanco Infratech rallied 3 percent each.
Gujarat State Petronet jumped 5 percent as Citi said the company was likely to be the biggest beneficiary. GSPL’s earnings could increase by 28-30 percent against a 7 percent increase for GAIL’s earnings. The brokerage said there was a potential 10-18 mmscmd of additional LNG import. GAIL was up 0.5 percent.