Broader market succumbs; Sensex slips 182pts

Another day, another fall. There was no respite for traders or investors alike as bear hammering, mainly in realty-cum-scam affected stocks continued for yet another day. Despite, starting a positive note, the markets soon took a sharp dip in morning amid fears of widening bribe-for-loan scandal and margin calls trigger in select realty stocks. The Sensex tumbled to a low of 18,957, its lowest level since September 13, 2010, with a host of mid-cap and small-cap stocks plunging over 20% each in intra-day deals.

According to reports, the Central Bureau of Investigation (CBI) has sent notices to 21 medium-to-large sized Indian companies regarding an ongoing probe into a financial bribery scandal. Further, on instances when the market is in continous down trend for series of days, margin calls are triggered either in cash or derivatives segment as traders have to constantly pay the mark-to-market differences.

The Sensex after the early morning dip, once again rebounded into the positive territory only to slip back at close. The BSE benchmark index, the Sensex, finally ended with a loss of 182 points at 19,137. The index shed almost 9% from its record peak of 21,005 on November 5, 2010.

The fall was sharper in the broader markets. The mid-cap and small-cap companies which outperformed the benchmark index in 2010, gaining 32% and 29%, respectively lost 5% each today compared  to the 1% fall in the benchmark index, Sensex. The indices fell for the third straight day on account of concerns that foreign institutional investors (FIIs) might exit the scam-hit companies. The small-cap index was down 4.7% at 9,963 while the mid-cap index lost 3% to settle at 7,852.

Asian markets too ended in the red amid choppy trades as the Korean tensions threatned to resume. Hang Seng lost 0.7% while the Nikkei dropped 0.4%. The Shanghai Composite ended down 0.9% while Jakarta Composite and Seoul Composite lost 1% each.

The European markets were no different. The indices opened in the negative. CAC and FTSE is trading down 1% each while DAX is lost 0.8%

All  the indices closed in the negative on the BSE sectoral chart. Realty continued to lose for the third consecutive day, closing nearly 5% down. Consumer durables down 4% was the other major loser. IT and Bankex which was in the green for the major part of the day, ended the week losing 0.3% each. The rebound in the Bankex in the early afternnon prevented the benchmark index from slipping futhur into the negative.

Of the 30 scrips on the Sensex, six of them ended in the green.

IT major, TCS was the top gainer gaining 2%, Cipla, SBI and Tata Power gained 1% each. ICICI Bank and ONGC added 0.6% and 0.3%, respectively.

Jaiprakash Associates, down 8% was the top loser on the Sensex followed by Reliance Infrastructure, Reliance Communications which shed 6% and 5%, respectively. Sterlite, Tata Motors, Mahindra & Mahindra lost 3% each are the other noteable losers.

The market breadth was very negative. Of the total 3072 stocks traded, 2505 stocks had advanced while 487 had declined.

Meanwhile, the initial public offer of the largest manganese ore producer in India, MOIL, opened for subscription today.

Scam hit Stocks:

DB Realty , LIC Housing Finance and Central Bank of India slumped 10-11%. Also, shares of select stocks dropped sharply after the Sebi reported the examining of the possibility of insider trading in shares of these companies. Adani Enterprises declined 16%, Money Matters Financial Services tumbled 10% and Pantaloon Retail lost nearly 2%.

Jaiprakash Associates tumbled to a 52-week low after media reports included the company in the housing loan scam. It was down 12.6% at Rs 100 on the BSE in the early afternoon trades.

India Infoline plunged 12% to Rs 80 as it was the leading manager in the QIP issue of Money Matter Financial Services.