Sensex ends 427 points lower; ICICI Bank, SBI dip 2%

Markets ended 1.5% lower on Friday with banks leading the decline amid rising bond yields while weak economic data also weighed on investor sentiment.

The 30-share Sensex ended down 427 points at 28,503 and the 50-share Nifty closed 128 points lower at 8,648.

"Profit taking was seen across the board with banks leading the decline as rising bond yields would erode the value of their bond portfolio's while the weakening rupee also weighed on market sentiment," said Deven Choksey, MD & CEO, K R Choksey Securities.

Meanwhile, foreign institutional investors were net buyers in equities to the tune of Rs 733 crore on Thursday as per provisional stock exchange data.

Further, in economic data released late Thursday, industrial growth in January slowed to 2.6% in January, against 3.2 per cent in December 2014. India’s Consumer Price Index (CPI) -based inflation rose to 5.37 per cent in February, from 5.19 per cent the previous month, mainly because of high food prices.

The Indian rupee weakend further and was trading lower at 62.84 to the US dollar compared to the previous close of 62.50 on the back of fresh dollar purchases by banks and importers while weakness in equities also weighed on sentiment.

All sectoral indices on the BSE ended in the red with Capital Goods index down 2.6% followed Bankex, Power, Auto and FMCG among others.

DLF ended nearly 6% higher, bouncing back 12% from intra-day low on the National Stock Exchange (NSE), amid reports that the Securities Appellate Tribunal (SAT) quashed the order passed by market regulator Securities and Exchange Board of India (Sebi) against the company for alleged non-disclosure of information during its initial public offering.

Financials having insurance subsidiaries which had surged ahead of the passage of the insurance bill witnessed profit taking. SBI and ICICI Bank ended down 2.2% each. HDFC Bank and Axis Bank ended down 0.8-2.5% each.

FMCG majors ITC and Hindustan Unilever ended down 2% each on concerns that higher retail inflation would lead to lower consumer spends and hurt volume growth.

Pharma stocks too are under pressure. Cipla, Dr Reddys Lab and Sun Pharma declined 1.7%-2.3% each.

State-owned thermal power generator NTPC received regulatory approval to issue Rs 10,307 crore worth of bonus debentures, the largest ever by an Indian company. The stock ended flat.

Capital Goods stocks were down amid subdued industrial growth in January. L&T and BHEL ended down over 3% each.

Metal shares ended lower. Hindalco, Sesa Sterlite and Tata Steel have lost over 2% each.

Among other shares, Shares of INOX Leisure ended nearly 1% higher after the foreign institutional investors (FIIs) bought the company’s equity shares through open market.

Shares of HSIL dipped 3% after the company said its board approved to issue equity shares to qualified institutional buyers (QIB) at a discount against floor price.

In the broader market, the BSE Mid-cap and Small-cap indices were down over 1.5% each.

Market breadth was weak with 1,949 losers and 906 gainers on the BSE.