Sensex down near 250 points; ITC slumps 5%

Benchmark indices have extended losses as sharp decline in the shares of ITC, ICICI Bank, L&T and Tata Group have wiped off the gains in the stocks of HDFC twins, ONGC and Bharti Airtel.
 
At 2:30 PM, the 30-share Sensex was down 257 points at 28,242 and the 50-share Nifty was down 99 points at 8,431
 
In the broader market, both BSE midcap and smallcap indices have declined sharply and are trading down by 2% and 2.8% each. Market breadth is highly negative with almost four declines for every advance.
 

Meanwhile, foreign institutional investors were net buyers in Indian equities worth Rs 407.42 crore on Monday, as per provisional stock exchange data.

 
The rupee is trading at 61.90 versus Monday's close of 61.93.  Further gains, however, are unlikely on the back of weak local shares.
 
Global Markets

Reacting late to the surprise rate cut by China, Japanese shares edged higher on Tuesday. The market was closed on Monday on account of national holiday. Strong buying in big names like Sony, Nissan and Panasonic have brought Nikkei to an advance of around 0.3%.
 
Chinese shares are trading mixed as analysts expect China to undertake further stimulus measures to revive growth. Shanghai Composite index is gaining more than 1% while Hang Seng index is marginally down by 0.2%

 
European markets have opened on a weak note after the head of the Bundesbank warning about the legal hurdles the European Central Bank would face if it went down the path of printing money to buy government bonds raised doubts about European Central Bank’s ability to launch its own quantitative easing program to address growth concerns of Europe.

FTSE 100 and CAC 40 indices have opened flat while German DAX is marginally up by 0.1%.
 
Buzzing Stocks
 
All the BSE sectoral indices are in red.  BSE Realty index is the biggest loser with almost 4% of decline followed by BSE Metal, Power, FMCG and Consumer Durables indices with near to 2% of losses.

 
BHEL, up 2% is the top gainer.  BHEL has gained on receiving a rating upgrade from Citigroup. Further, in a clarification to BSE on the reports about the company setting up two power plants of Rs 3000 crore in Russia, the company said that the subject matter is only at a proposal stage and as such is not a price sensitive information.
 
HDFC twins are trading with gains of more than 1%. HDFC Bank has rebounded after a weak opening   as today it was excluded from the MSCI and technical analyst had  expected selling of around $250 million.

 
Bharti Airtel has gained 1.2% on reports that the company has decided to sell more than 4,800 mobile phone masts in Nigeria to American Tower Corp for $1.05 billion to cut costs and pare debt.
 
Among losing stocks, ITC has declined close to 5%. Government has decided to ban the sale of loose cigarettes which may hit the profits of the company.
 
Shares of most of the frontline banks are trading lower between 1-4% on profit booking after rallying 20% in past one and half months.

Canara Bank, Bank of India, Federal Bank, Yes Bank, Punjab National Bank, Kotak Mahindra Bank, ICICI Bank and Bank of Baroda are down between 2-4%, while State Bank of India (SBI), IndusInd Bank and Axis Bank are down 1% each

Tata Power has declined 1.5% ahead of the Supreme Court hearing on compensatory tariff to take place later today.
 
Tata Motors has declined more than 1% after it apparently failed to take benefit of the strong interest shown by buyers in its newly launched model 'Zest' and due to production roadblocks the waiting period for the model’s automated manual transmission (AMT) variant has soared to six months. “After a long time we had a golden opportunity with the Zest but we may have missed it,” said Mayank Pareek, president-passenger vehicle business unit, Tata Motors.
 
Shares of Power Grid Corporation of India is trading lower by 3.4% extending its previous day’s 3% fall on BSE, after the Reserve Bank of India (RBI) put restrictions on further purchases of shares of the company by foreign investors.

 
Jindal Steel has declined around 3%  on cancelling a $10 billion coal-to-diesel project, becoming the first big  casualty of a Supreme Court (SC) decision to scrap coalfields allocated to private firms since 1993.
 
Among other shares, Ricoh India has surged 5%E after the company said it received an order worth of Rs 1,370 crore from Department of Posts, Government of India.