Sensex slumps over 350 points, interest sensitive stocks drown (Roundup)

A day after it crashed by 660 points, a benchmark index of the Indian equities markets, the 30-scrip BSE Sensitive Index (Sensex), slumped over 350 points on Wednesday.

The wider 50-scrip Nifty of the National Stock Exchange (NSE) also closed deep in the red, closing 101.35 points or 1.23 percent down at 8,135.10 points.

The Sensex of the S&P Bombay Stock Exchange (BSE), which opened at 27,230.68 points, closed the day's trade at 26,837.20 points, down 351.18 points or 1.29 percent from the previous day's close at 27,188.38 points.

The Sensex touched a high of 27,276.22 points and a low of 26,698.26 points in the intra-day trade.

During Wednesday's trade, all the sector-based indices of the BSE, except for the information technology (IT), ended lower.

Heavy selling was observed in interest sensitive stocks like banking, automobile, fast moving consumer goods (FMCG), capital goods, healthcare, oil and gas and consumer durables stocks.

The S&P BSE bank index plunged by 290.85 points, automobile index sank 282.37 points, FMCG index tanked by 265.52 points, capital goods index slumped by 255.17 points, healthcare index dropped by 238.18 points, oil and gas index dwindled by 196.87 points, and consumer durables index receded by 178.64 points.

The S&P BSE IT index rose by 17.65 points.

Analysts said that Indian markets continued to witness selling pressure on the back of rupee depreciation, monsoon concerns, and continued selling from foreign portfolio investors.

"Worst hit were real estate and infrastructure stocks, especially Unitech, JP Associates on the rumours of debt repayment default. Other FMCG major Nestle hogged the limelight with a sharp fall on the concern over Maggi noodle recall," said Gaurav Jain, director, Hem Securities.

The controversy surrounding its best-seller brand Maggi noodles heavily dented the stocks of fast moving consumer goods (FMCG) major Nestle India, declining by 9.05 percent or 616.35 points at Rs.6,191.10 per equity share from its previous close of Rs.6,807.45.

Concerned over the forecast of a 12 percent shortfall in rain during this monsoon season and the Reserve Bank of India's concerns over a host of factors, including growth and inflation, realty stocks fell sharply on Wednesday, with Unitech leading the losers with a 35 percent drop.

The index for realty stocks on BSE was down nearly 5.54 percent at close, with just two scrips out of the 13 that make up its basket managing to stay afloat.

Unitech closed as much as 35.27 percent lower at Rs.8.70. At one point, the scrip lost as much as 52 percent, taking into account the day's high and low.

Analysts also pointed out that the 25 basis points cut by the apex bank in its bi-monthly policy review on Tuesday was factored-in by the market and that it was hoping for a 50 basis points cut.

"Market is in a backtrack post the disappointment from policy meet. As the policy outlook provides no scope to have further cut in the medium-term, interest sensitive stocks like banks and industrials are consolidating down," said Vinod Nair, head for fundamental research, Geojit BNP Paribas Financial Services.

"Now, trigger is in the hands of government to provide additional support to the business confidence and outlook," Nair said.

Other developments like Adani enterprises' massive price difference, post its demerger, caught some traders by surprise while other triggers in the day's trade were the announcements made by the RBI on rain forecasts.

The major Sensex gainer on Wednesday were: Coal India, up 0.81 percent at Rs.386.70, Bharti Airtel, up 0.79 percent at Rs.421.25, Infosys, up 0.71 percent at Rs.2,023.10, Tata Consultancy Services (TCS), up 0.40 percent at Rs.2,610.75; and NTPC, up 0.22 percent at Rs.138.25.

The major losers were: Tata Power, down 6.13 percent at Rs.70.40; ITC, down 4.59 percent at Rs.304.25; ONGC, down 3.81 percent at Rs.308.05; Vedanta, down 3.67 percent at Rs.187.55; and Gail, down 3.44 percent at Rs.374.55.

Among the Asian markets, Japan's Nikkei closed lower by 0.34 percent. China's Shanghai Composite Index was marginally lower by 0.01 percent, while Hong Kong's Hang Seng increased by 0.69 percent.

In Europe, London's FTSE 100 was higher by 0.38 percent. France's CAC 40 rose by 1.05 percent, Germany's DAX Index was up by 1.05 percent at the closing bell here.