Sensex down over 200 points; Tata Motors, RIL dip 3%

Investors booked profits at higher levels after gains in the previous eight sessions

Benchmark share indices were down 1% in noon trades as investors booked profits in index heavyweights after sharp gains in the previous eight sessions.

At 1:45PM, the 30-share Sensex was down 254 points or 1% at 26,018 and the 50-share Nifty was down 76 points or 1% at 7,755.

On Thursday, the Sensex registered its longest 8-day rally in the last almost two-years to close a record high on expectation of domestic recovery and strong buying from overseas investors.

The BSE Sensex surged 1,265 points in the past eight trading days between July 15 and July 24.
ICICI Bank, Reliance Industries, Tata Consultancy Services (TCS), Housing Development Finance Company (HDFC) and Infosys contributed a combined 659 points or 52% to the 1,265-point rally in the Sensex.

Meanwhile, Foreign investors bought Indian shares worth 2.82 billion rupees on Thursday, as per provisional data.

The Indian rupee was trading higher at Rs 60.07 compared to the previous close of Rs 60.12. However, dollar demand from oil importers is likely to cap further gains.

Asian markets were trading higher with the shares in Japan and China gaining the most. Japan's benchmark Nikkei ended up 1.1% to end at 15,457.87. Chinese shares were up on the back of upbeat PMI data. The Shanghai Composite was up 1% while Hang Seng was up 0.1%. Meanwhile, shares in Singapore witnessed profit taking after recent gains. Straits Times was trading 0.4% lower.

European shares were trading lower as weak corporate earnings weighed on investor sentiment. The CAC, DAX and FTSE were down 0.1-0.8% each.

The BSE Realty index was down 3.3% followed by Power, Oil and Gas, Metal, Capital Goods, IT and Banks. However, defensive sectors were seen higher with FMCG and Healthcare indices up 0.6-0.9% each.

Index heavyweight Reliance Industries was down 2.8% at Rs 1,011 while state-owned ONGC was down 1.1%.

In the banking sector, ICICI Bank, SBI, Axis Bank and HDFC Bank were down 1-1.8% each.

Capital goods shares which had rallied in the previous sessions also witnessed profit taking with L&T down 1% and BHEL losing 4.8%.

IT majors TCS and Infosys which had rallied post their first quarter earnings were also trading lower with Infosys down 1.6% and TCS down 0.5%.

Wipro which announced its results late Thursday was down nearly 5% because of flat growth in dollar revenues and declining margins from IT services. In dollar terms, IT services revenue was $1,740 million, a sequential increase of 1.2%, Wipro said in a statement. The operating margin of IT services declined to 22.8%, from 24.5% in the previous quarter, impacted due to wage hikes.

Metal shares which had rallied amid upbeat economic data from China also witnessed profit taking. Sesa Sterlite, Hindalco and Tata Steel were down 2-3% each.

Among other shares, Shares of Goa Carbon slumped nearly 8% to Rs 93 after the company said it has received notice from the State Pollution Control Board, Odisha for closure operations at its Paradeep plant.

Indiabulls Housing Finance zoomed 6% to Rs 390 on the BSE after the company’s consolidated net profit jumped 21% at Rs 424 crore on 19% growth in total revenue to Rs 1603 crore in Q1 June 2014 over the same period last year.

The broader market also witnessed selling pressure with the BSE Mid-cap index down 1.8% and the BSE Small-cap index down 2.4%.

Market breadth weakened further with 1,983 losers and 743 gainers on the BSE.