Equity benchmarks fell more than 1 percent on global weakness, dragged by banking & financials, technology and metals shares. The 50-share NSE Nifty breached 7800-mark, down 105.75 points or 1.35 percent to close at 7731.80.
The 30-share BSE Sensex plunged 381.95 points or 1.48 percent to 25482.52. The fall in broader markets was less compared to benchmarks as the BSE Midcap and Smallcap indices were down 0.7 percent each.
Analysts feel margin calls could get triggered if the Nifty breaks 7700 level. According to them, the current correction (which triggered by security concerns in Europe post Paris attacks and strong dollar) may continue for couple of days but there could be bounce back next week ahead of expiry of November derivative contracts. However, they remain positive on market for medium to long term.
Investors may have also lightened their positions ahead of the FOMC minutes of meeting, which will be released tonight. Investors fear that the language of these minutes of meeting may signal a higher probability of a rate hike in December, feels Sanjeev Zarbade, Vice President-PCG Research, Kotak Securities.
Jai Bala of 1857 Advisors remains optimistic saying as long as Nifty holds 7,591 , one can be a bit positive.
European markets traded lower today as further security scares after the Paris attacks last Friday weigh on investor confidence. France’s CAC, Germany’s DAX and Britain’s FTSE were down 0.4-1 percent (at 16 hours IST). Asian markets also closed lower with the Shanghai Composite down 1 percent and Hang Seng down 0.3 percent.
On home turf, Infosys extended losses today as well, down 3.9 percent on margin warning for H2FY16. The Nifty IT index lost 1.8 percent. TCS was down 1.6 percent and Wipro declined 0.6 percent.
Metals also lost shine with the Nifty Metal index down more than 2 percent. Tata Steel and Vedanta were down 3.7 percent and 3 percent, respectively.
Hindalco Industries plunged 5 percent. Sources told CNBC-TV18 that the aluminium major is in the process of restructuring its debt. The company has a three-year pronged strategy to bring down its debt starting with a USD 1.5 billion bond issue. At present, Hindalco has a consolidated debt of Rs 60,000 crore.
Bank Nifty declined nearly 2 percent as majors like ICICI Bank, HDFC Bank, SBI and Axis Bank dropped 1-3 percent.
Coal India bucked the trend, up 0.8 percent. The government in its cabinet meeting today has approved 10 percent divestment in the company. Nomura says current disinvestment overhang offers a good opportunity to accumulate the stock.
In broader space, GMR Infrastructure gained 7 percent after its Kamalanga energy plant received a favourable tariff order from CERC, which will boost the company’s operating profit. Eros International Media rallied 5 percent, riding on strong September quarter earnings of its parent company that reported a 155 percent growth in bottomline.
The market breadth remained weak as about 1612 shares declined against 1048 advancing shares on the Bombay Stock Exchange.