Sensex recoups most losses to end 31 pts down after SC verdict

The benchmark Sensex today dropped over 215 points in a knee-jerk reaction to Supreme Court cancelling allocation of 214 coal mines but recouped most losses to end the day just 31 points lower with Coal India shares surging 5 per cent.
Fag end short-covering a day ahead of expiry of September derivatives contract also helped the index recover, said traders.
Shares from realty, capital goods, consumer durable, banking and auto sectors were at the receiving end while FMCG, pharma counters caught the attention as safe bets, they added.
The benchmark BSE S&P Sensex initially touched a high of 26,844.70 but dropped to a low of 26,560, down by over 215 points when news of cancellation of coal blocks filtered in.

Later, it rebounded to settle at 26,744.69, showing a minor fall of 31 points or 0.12 per cent. Yesterday, it had fallen 431 points in line with global markets on growth woes.
Overnight heavy selling by foreign funds amid some weakness in global equities weighed on the market. FPIs/FIIs pulled out Rs 1,185.17 crore yesterday, as per provisional data with stock exchanges.

In a major blow to the corporate sector, the Supreme Court today quashed allocation of 214 out of 218 coal blocks which were alloted to various companies since 1993. It also directed companies, which were allocated coal blocks but had not operationalised them, to pay a compensation to the government for the loss of exchequer.

Shares of Jindal Steel and Power Ltd closed sharply down by almost 10 per cent. Bhushan Steel, SAIL, Tata Steel and Hindalco also ended down.
"...Gradual recovery was witnessed in the index majors post a sharp fall due to SC coal verdict, which helped index to recover significantly from the day's low," said Jayant Manglik, President-retail distribution, Religare Securities.
The broad-based 50-issue CNX Nifty of the NSE also eased by 15.15 points, or 0.19 per centm to 8,002.40. It had touched a low of 7,950.05 during intra-day trade.
Second-line stocks continued to bore the brunt of heavy selling by retail investors. The BSE-Smallcap and the BSE-Midcap indices closed down by 1.62 per cent and 1.19 per cent respectively, underperforming the Sensex.