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Shell firm order, North Korea tension drag Sensex below 32,000

Sebi clamped down on 331 such companies on Monday, directing exchanges to take action against them

Press Trust of India  |  Mumbai 

Sebi
Sebi

It was a third straight session of loss for stocks on Wednesday, as the benchmark took a hit of 216 points, or 0.68 per cent, to close at a three-week low below the 32,000-mark on growing sense of disquiet following market regulator Sebi’s crackdown against suspected shell companies.

The Securities and Exchange Board of India (Sebi) clamped down on 331 such companies on Monday, directing exchanges to take action against them.

Investors also ran for cover after a flare-up in tension between the and over the latter’s ballistic missile programme. They fear for the worse as both sides show no signs of backing down, according to traders.

Selling pressure built up following muted June quarter earnings by some companies, they added. It was so strong that all the sectoral indices, led by health care and auto, ended in the negative zone. The recovered partially before settling down 216.35 points at 31,797.84, its lowest closing since July 18.

Sebi
The gauge has now lost 527.57 points in three sessions.

The Nifty also remained under pressure and was down 70.50 points, or 0.71 per cent, to close at 9,908.05. Intra-day, it cracked below the 9,900-mark to touch 9,893.05.

"Global headwinds owing to geo-political tension between and the provided more cues to the domestic market, which is already reeling under Sebi's regulatory pressure... Small- and mid-cap underperformed today (Wednesday)," said Vinod Nair, head of research at Geojit Financial Services.

Overseas, Asian stocks ended lower and European shares dropped during early hours. In the pack, Sun Pharmaceutical Industries was battered the most, plunging 5.13 per cent to an over four-year low, after its subsidiary Taro Pharmaceutical Industries reported weak quarterly numbers.

Graph
Source: Bloomberg, Compiled by BS Research Bureau
Others to lose ground were Adani Ports (4.12 per cent), along with Cipla, Tata Motors and Bajaj Auto. But, NTPC looked up, climbing 1.25 per cent, followed by ONGC, HDFC and Asian Paints.

Foreign portfolio investors (FPIs) were net buyers of shares worth Rs 1,539.82 crore, while domestic institutional investors (DIIs) bought shares worth Rs 798.55 crore on Tuesday, provisional data showed. The selling activity accelerated in broader markets, with small-cap index sliding 1.88 per cent and mid-cap 1.66 per cent. 

Key indices in Japan, Hong Kong, Singapore, China and Taiwan moved down by up to 1.29 per cent.

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