Markets get over Bihar crash; Sensex down 144 points (Roundup)

A barometer index of the Indian equity markets recovered after an initial fall of more than 600 points, after the central government assured investors that the reforms process will continue.

The barometer 30-scrip sensitive index (Sensex) of the S&P Bombay Stock Exchange (BSE) closed the day's trade 144 points or 0.55 percent down.

The wider 50-scrip Nifty of the National Stock Exchange (NSE) also receded in the day's trade. It closed lower by 39.10 points or 0.49 percent at 7,915.20 points.

The S&P BSE Sensex, which opened at 25,809 points, closed at 26,121.40 points, down 143.84 points or 0.55 percent from the previous day's close at 26,265.24 points.

The Sensex touched a high of 26,193.17 points and a low of 25,656.90 points during the intra-day trade.

Investor sentiments were subdued, a day after the BJP-led coalition suffered a rout in the Bihar assembly polls. The BJP is considered to be more business and reform friendly.

Both the indices of the Indian equities markets opened in the negative territory and plunged by more than two percent each in the initial trade session.

Notwithstanding the slide, positive comments from the Finance Minister Arun Jaitley over the continuation of the reforms process restored investors' confidence. This led the Sensex to reverse losses of nearly 400 points and the Nifty regaining nearly 100 points.

Jaitley spoke to the media in New Delhi and said that the reforms process such as the passage of the goods and services tax (GST) will not be hindered by the BJP's defeat at the Bihar polls.

Bargain hunting and recent reforms measures announced for the power and banking sector too restored investors' interest.

Market observers cited the cascading impact of a combined punch from the Bihar poll outcome, heightened chances of a US rate hike and disappointing quarterly results as the reason for the markets' fall.

"The Bihar polls outcome has cast a shadow over the popularity of the central government. The outcome means a stronger opposition and this may lead to delays in future reforms measure," Anand James, co-head, technical research desk with Geojit BNP Paribas Financial Services, told IANS.

"The finance minister's comments and clarity regarding the upcoming reforms in the winter session helped markets regain some of its lost ground," James added.

Parliament's winter session will start from November 26. The decision was taken on Monday by the Cabinet Committee on Parliamentary Affairs (CCPA).

The heightened chances of a US rate hike in December after better-than-expected data released late on Friday and hawkish comments from the US central banks spooked investors.

"Better-than-expected US jobs data and weak Chinese trade data also added to the pressure. We expect markets to trade in a range as market participants would refrain from taking huge positions in a curtailed week," Vaibhav Agrawal, vice president, research, Angel Broking, told IANS.

A US rate hike could potentially lead to massive amounts of pull-back of foreign funds from emerging markets (EMs) like India. Besides sucking away funds from EMs like India, it will dent business margins, as access to capital from the US will become expensive.

The foreign institutional investors (FIIs) were net sellers in the day's trade at stock exchanges, whereas the domestic institutional investors (DIIs) were net buyers.

According to data with stock exchanges, the FIIs sold stocks worth Rs.861.06 crore, while the DIIs bought stocks worth Rs.621.18 crore.

Sector-wise, healthcare, capital goods and banking declined in the day's trade. On the other hand, consumer durables, automobile and fast moving consumer goods (FMCG) stocks gained.

The S&P BSE Healthcare index plunged by 221.86 points, capital goods index receded by 89.96 points, banking index plummetted by 65.81 points.

The consumer durables index augmented by 263.40 points, automobile index gained by 227.73 points and FMCG index was higher by 91.01 points.

Major Sensex gainers during Monday's trade were Tata Motors, up 3.89 percent at Rs.411.65; Maruti Suzuki, up 2.54 percent at Rs.4,637.60; ITC, up 1.59 percent at Rs.342.25; Vedanta, up 1.52 percent at Rs.93.65; and State Bank of India (SBI), up 1.17 percent at Rs.246.10.

The major Sensex losers were Sun Pharma, down 5.82 percent at Rs.756.90; BHEL, down 3.86 percent at Rs.184.40; Dr.Reddy's Lab, down 3.44 percent at Rs.3,504.60; Wipro, down 1.99 percent at Rs.560.15; and ICICI Bank, down 1.70 percent at Rs.262.90.