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| Heavyweights spook markets, Sensex slips 1.4% |
| SI Reporter / Mumbai May 05, 2011, 15:51 IST |
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Markets were choppy for the most part of the day as investors stayed to the sidelines due to lack of direction, but heavy selling during the afternoon trades frontliners- ICICI Bank, ITC, HDFC Bank and Bharti Airtel dragged the benchmark Sensex down by 114 points.
The S&P CNX Nifty opened in the red and moved between gains and losses before giving into selling pressure in index heavyweights which took the market to a low of 5443. The Nifty closed near the day’s low at 5,460, down 77 points and the Sensex at 18,211, down 259 points. Both the indices closed in the red for the ninth consecutive session.
FIIs have been net sellers in cash market for the past 8 sessions and have sold shares worth Rs 5597.8 crore. The markets have also been trading below the 200 Daily Moving Average for the past four sessions indicating that markets are in a bear grip and investors have also turned jittery over concerns that rise in interest costs may hurt corporate earnings.
Ashish Chaturmohta, VP (Derivatives & Technical Analyst) from IIFL Wealth said, “Heavy call writing was seen at 5600 and 5700 levels total. Also traders who expected a pullback rally after 8 straight sessions of decline were not able to exit positions and stop losses got triggered causing further weakness in the markets.”
Ashish added, “Nifty has broken 5500 support and closed below the crucial support level which may lead to further selling to 5300.” On the upside, buying will only emerge if Nifty sustains above 5700 levels on closing basis. Also food inflation fell to 8.53% for the week ended April 23 against 8.76% in the previous week on back of fall pluses prices, but it was unable to cheer the markets.
Markets across Asia were also weak. Stocks edged lower in Hong Kong due selling in the energy sector causing the index to decline 0.2% at 23,259. Also China's Shanghai Composite index also lost 6.4% since reaching its highest level in 2011 on April 18, after fresh data showing persistently high inflation accompanied by slowing growth exacerbated fears of further monetary tightening.
However Taiwan markets bucked trend and closed above the 9,000 point led by fresh fund flows as bargain hunters turned active to pick up large cap stocks. The index rose 0.8%, to end at 9,019, after moving between 8,908 and 9,029.
BSE Realty and Power shares were leading the losses; the indices were ended down 3% and 2.4% each.
From the realty pack, HDIL was the top loser, down 8.1%, Anant Raj Industries declined 4.1% and DB Realty was off 3.2%. Investors dumped realty shares on concerns that rising loan rates by banks will dent the housing demand.
From the power space prominent losers were Tata Power, off 5.2%, Reliance Infra slipped 4.2% and Reliance Power declined 2.4%. From the Sensex stocks, heavyweight Bharti Airtel fell 3.3% after it reported 31% dip in fourth quarter net profit, ICICI Bank and HDFC Bank fell over 2% on concerns that rising interest rates may eat into the banks margins, and ITC declined 2.3%.
Only three components on the Sensex ended in the green, Hero Honda bucked trend and surged 6%, it was the top Sensex gainer after it reported Rs 500-900 crore expansion plan, Reliance Industries and Maruti Suzuki ended marginally higher.
Also midcap and smallcap indices were down almost 1% each. Market breadth was negative, 1931 stocks declined for 867 stocks which advanced.
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