Stocks sink on rain scare

Worst weekly fall for Sensex since October

Stocks sank once again, completing the Bombay Stock Exchange Sensitive Index’s worst week since October, after Agriculture Minister Sharad Pawar said monsoon rainfall has been deficient.

Pawar said in the Lok Sabha today that the northwest region, which included the biggest grain growing states of Punjab, Haryana and Uttar Pradesh, had seen deficient rains. Though Pawar hoped the situation would improve and India had enough foodgrain to meet demand for 13 months, the market wasn’t convinced.

The Sensex fell 253.24, or 1.8 per cent, to 13,504.22. The index has dropped 9.5 per cent this week. The S&P CNX Nifty Index on the National Stock Exchange fell below the support level near 4,000 for the first time since election results in mid-May.

India was the worst performer among its global peers this week. The Nikkei -225 and Hang Seng lost 5.39 per cent and 2.72 per cent, respectively. The Nasdaq and Dow Jones had lost 2.45 and 1.18 per cent till Thursday.

The better-than-expected Infosys results today had led to a 300-point rally in the morning, but the monsoon scare played spoilsport with Reliance Industries leading the slide, losing 4.2 per cent to Rs 1,775.15.

The information technology (IT) index was the only sectoral index in the green and closed up by 2.17 per cent. Infosys rose 2.97 per cent while other IT majors Wipro and TCS gained 1.56 per cent and 3.37 per cent respectively.

But market experts do not believe that IT stocks can rise too much. “While Infosys’ results were a pleasant surprise, but IT stocks were already valued at 12-17 price earnings,” said Deven Choksey , managing director, KR Choksey.

All the other sectoral indices closed in the red today. Oil & gas, power, capital goods, realty and public sector units were down between 2 and 3.28 per cent.

The other major laggards in the Sensex were Reliance Infrastructure, Jaiprakash Associates, Reliance Communications, HDFC and Sun Pharma. All of them were down between 4 and 6.5 per cent. Reliance Industries and Mahindra fell 3.99 per cent and 3.88 per cent.

The market breadth was negative today. Out of 3,915 stocks traded, 2,714 declined while 1,098 advanced.

During the week, Reliance Infrastructure lost the maximum at 20.3 per cent. Tata Steel (19.4 per cent), DLF (17.3 per cent) and Reliance Communications (17.2 per cent) were the other major losers. ITC added 9.7 per cent this week, followed by Hero Honda (5.7 per cent) and Maruti Suzuki (4.5 per cent).