IT, bankex stocks pull down Sensex 324 pts

Profit booking for the second straight day pulled Bombay Stock Exchange (BSE) Sensex and National Stock Exchange (NSE) Nifty lower. Domestic institutional investors (DIIs), led by insurance companies, have been the top sellers since Monday, and the fall was in line with other global indices.

Sensex shed 324 points or 2.31 per cent to close at 13,736, while the broader index Nifty was down 59 points or 1.39 per cent at 4,210. The fall was led by index heavy weight Reliance Industries Ltd and banking and information technology stocks.

The US markets ended lower on Wednesday, after rating agency Standard & Poor’s lowered credit-rating outlook on Britain, raising fears of a downgrade of the US government’s debt as well. The Dow Jones Industrial Average was down 0.62 per cent. The S&P 500 fell 0.51 per cent and the Nasdaq Composite declined 0.39 per cent.

After Sensex, Hang Seng was the top loser in Asia down 1.58 per cent. Sanghai Composite down 1.54 per cent and Nikkei was down 0.86 per cent. Taiwan Weighted was marginally up 0.23 per cent.

“It is likely that markets may witness some further correction and fall below 4,100 as the unprecedented global rally too has halted on the back of profit booking,” said Avinash Gupta, head of equities at Mumbai-based Bonanza Capital. Back home, the public sector oil companies registered major gains on expectations that petroleum ministry had prepared a draft cabinet note on removing government-control over petrol and diesel prices, after which they will be linked to international movements.