Sensex down over 150 points; L&T down 2%

Markets are trading near their day's lows amid profit taking in financials and capital goods shares after sharp gains recently

Markets extended losses in noon trades with the Sensex down over 150 points  amid profit taking in financials and capital goods shares.

At 1:10PM, the 30-share Sensex was down 175 points at 24,205 and the 50-share Nifty was down 53 points at 7,222.

ICICI Bank, Axis Bank, HDFC Bank and SBI were down 1-2% each.  Capital goods shares which had a sharp run-up in the past few sessions also witnessed profit taking with L&T down 2.3% and BHEL lost nearly 4%.

Other Sensex losers include, Sun Pharma, Tata Motors and ONGC.

Among other shares, SKS Microfinance has surged 9% to Rs 281 on back of heavy volumes on the bourses. The stock opened at Rs 258 and touched a low of Rs 241 so far on the Bombay Stock Exchange (BSE).

The broader markets outperformed the benchmark indices, the BSE Mid-cap index was up 0.7% and Small-cap index gained 1.1%.

Market breadth was strong with 1,761 gainers and 953 losers on the BSE
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(Updated at 11:20AM)

The benchmark indices are trading sideways, albeit with a downward bias, this morning. The Sensex is at 24,341, lower by 35 points and the Nifty is at 7266, down nine points. The broader markets are, however, rank outperformers for the third consecutive session, as evidenced by the one-percent jump in both the midcap and smallcap indices at 8341 and 8721 respectively, and the 4-1 advance-decline ratio. 

 

The demand for mid-cap stocks has surged as investors search for stocks that are likely to benefit from a turnaround in the economy post the new regime at the Centre.  Moreover, the run-up in the index stocks and a resultant jump in stock valuations seem to be attracting money, lying on the sidelines, into the  mid-cap universe. For instance, the S&P BSE Sensex is up 17% from its 2008 peak, whereas the BSE Midcap index is trading 20 per cent lower than its all-time high in 2008. Even based on historical valuation, the BSE Midcap index is trading at 10.75 times its earnings and 0.96 time its book value versus 18 times and 2.87 times, respectively, for the Sensex.

 

In the BSE 100 space, Power Finace has soared by 6.6% at Rs 298 and IDBI Bank has jumped by 4.1% at Rs 90. In the mid-cap banking space, IDBI Bank has jumped by 4.1% at Rs 90, Federal Bank has gained 2.6% at Rs 119 and Bank of India had added 2.5% at Rs 315.

 

In the BSE large-cap space, the capital goods and banking stocks are under pressure in mid-morning trades. L&T has slid by 1.5% at Rs 1485 to top the loser's list on the BSE and BHEL has lost 1.4% at Rs 273. In the banking space, Axis Bank has weakened by 0.85% at Rs 1840, SBI has shed 0.8% at Rs 2505 and HDFC Bank has lost 0.6% at Rs 810.

 

On the other hand, Bajaj Auto has raced ahead by 3.2% at Rs 1933 to top the gainers list on the BSE. NTPC has extended its recent gains and is up 1.6% at Rs 145. Index bellweather RIL has jumped by 1% at Rs 1089. The IT stocks are also seeing some buying interest, with Infosys gaining 0.6% at Rs 3140 and TCS adding 0.4% at Rs 2072.

 

In stock-specific action, Gati has rallied 7% to Rs 103 after Macquarie Bank, a unit of Australia's Macquarie Group, acquired a stake of over 1% in the company for Rs 10 crore through an open market purchase.

 

Punj Lloyd has tanked 9% to Rs 38.85 after reporting a consolidated net loss of Rs 382 crore for the fourth quarter ended on March 31, 2014 (Q4FY14), on the back of a decline in income and deferment of claim settlement on some overseas projects. 

 

VIP Industries has soared 7% at Rs 114 on the Bombay Stock Exchange after the company's consolidated net profit rose 300% in the fourth quarter ended March 31, 2014, in results announced late Tuesday.