Auto, metals send mkt into a 390-point tailspin

Stock market indices slipped On Thursday as investors rushed to book profit in select sectors such as auto and metals.

Market sources said that while there was some selling from institutions initially, a lot of high networth individuals raised cash to invest in power utility National Hydroelectric Power Corporation’s Rs 6,000-crore initial public offering (IPO) that opens tomorrow.

The Bombay Stock Exchange Sensitive Index, or Sensex, finally closed at 15,514.03, down 389.80 points, or 2.45 per cent, the highest in a month. The CNX Nifty tumbled to 4,585.50, down 108.65 points, or 2.31 per cent.

“After witnessing an uptrend in Indian markets for quite some time, some major profit-booking occurred On Thursday as there was some unwinding of position by investors,” said Vaishali Pitale, vice-president, Brics Securities.

US markets were flat on Wednesday on weak private payrolls and worse data from the services sector than estimated by economists. The Dow Jones was down 0.42 per cent and the Nasdaq slipped 0.91 per cent.

Asian markets were mixed On Thursday. The Hang Seng soared 1.97 per cent – a 11-month high – after wiping off early losses. There was strong buying in China Mobile on speculations that the company was on its way to getting listed in Shanghai.

The Nikkei advanced 1.32 per cent, which is also its highest close in 10 months. The Shanghai Composite Index shed 2.11 per cent, while the other indices were mostly flat.

Mid-cap and the small-cap indices also suffered. The mid-cap index slipped 2.39 per cent and the small-cap index was down 1.29 per cent.

The market breadth was negative On Thursday. Out of 2,780 shares traded, 1,642 declined, 1,072 advanced and 66 were unchanged on the BSE On Thursday.

All the sectoral indices ended in the red. The BSE Auto index slumped 4.43 per cent, followed by realty (3.65 per cent), FMCG (3.29 per cent), metals (3.05 per cent), power (2.30 per cent), consumer durables (2.13 per cent), capital goods (2.12 per cent) and IT (2.09 per cent).

Auto stocks bore the maximum brunt of selling on reports of a below-normal monsoon adversely impacting auto sales in the rural sector. Tata Motors shed 6.93 per cent, followed by Maruti Suzuki (5.34 per cent), Hero Honda (5.25 per cent) and Mahindra & Mahindra (4.14 per cent).

The other major index draggers were Hindalco, down 6.50 per cent. Jaiprakash Associates (5.53 per cent), ACC (4.94 per cent), Sterlite (4.79 per cent) and ITC (4.02 per cent) followed. Tata Steel, Hindustan Unilever, Grasim Industries, ONGC, Reliance Communications and Reliance Infrastructure declined 3-4 per cent each.

Sun Pharma and Wipro were the only index gainers. Sun Pharma was up 1.53 per cent and Wipro was flat at 0.04 per cent.