Sensex slumps over 100 pts; BHEL down 3%

Benchmark indices have extended losses with the Sensex and the Nifty hitting over one-week low.

At 1250 hrs, the Sensex was up 130 points at 22,229 and the 50-unit Nifty shed 32 points at 6,662 levels.

NSE's volatility index, or the domestic equivalent of the VIX fear gauge, advances 11.2 percent, to mark its highest in four months on rising fears of profit-booking after a recent rally as the world's largest democracy goes to polls, starting Monday till May 12.

Adds Navneet Daga, Deriviative Analyst, KR Choksey Securities, “Nifty for April series now will become more volatile within the boundaries of 6600-6900 where the maximum put and calls buildup is visible. Profit taking is advisable with fresh new longs to be buildup only on closing above 6770 zone on nifty futures. Short strangle should be initiated with strikes of 6600 put and 6900 call. Markets are likely to be in this range for April series.”

On the political front, opposition Bharatiya Janata Party (BJP), widely tipped to form the next government, said in its election manifesto on Monday it would encourage foreign direct investment but appeared to close the door to global retailers eyeing the country.

In Asia, Japan's Nikkei share average tumbled to a one-week low on Monday dragged down by tech shares following a slide on Wall Street, while a strong yen hit exporters to round out a harsh day for the market.

Index heavyweight SoftBank Corp fell sharply in the wake of a sell-off in U.S. tech names, ending 4.6 percent lower and was the most traded stock by turnover.

The Nikkei ended 1.7 percent lower at 14,808.85, the weakest closing level since April 1.

Back home, foreign institutional investors (FIIs) bought shares worth a net Rs 232.46 crore on Friday, 4 April 2014, as per provisional data from the stock exchanges.

On the sectoral front, BSE Realty and Consumer Durables indices have plunged by 2% each followed by counters like Power, Capital Goods, Metal, IT, FMCG and Healthcare, all falling down by nearly 1% each.

The main losers on the Sensex at this hour include BHEL, Maruti Suzuki, Cipla, ICICI Bank, Hindalco, HDFC, DR Reddy’s Labs and Infosys.

Bharat Heavy Electricals Limited (BHEL) is trading lower by nearly 3% at Rs 179 on the NSE, after the company said net profit for the financial year 2013-14 (FY14) more than halved to Rs 3,228 crore on account of low volumes and challenges in the domestic power sector.  

On the gaining side, Sun Pharma, M&M, Wipro, Sesa Sterlite and HDFC Bank have gained between 0.5-1.2%.

Sun Pharmaceutical Industries is trading higher by over 1% after the company announced that it will buy Ranbaxy Laboratories in an all-share deal, creating the world's fifth-largest generic  pharma company.

Among other shares, Housing Development and Infrastructure  (HDIL) is trading higher by 6% to Rs 73.75, extending its Friday’s 16% rally, after Nomura Singapore Limited acquired nearly 1 percentage point stake in the Mumbai-based real estate firm through an open market transaction.

Diamond Power Infrastructure has surged 10% to Rs 72, extending Friday’s 19% rally, after overseas investors acquired nearly 5% stake in the company for Rs 14 crore through the open market.

The broader markets are trading weak in line with the benchmark indices- BSE Midcap and Smallcap indices are down 0.3-1%.

The market breadth in BSE remains unhealthy with 1,142 shares declining and 948 shares advancing.