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Markets snap 5-day rally

SI Reporter  |  Mumbai 

The broke their five-day winning streak amid political uncertainties surrounding the widening probe into the 2G scam, impending weekend and resistance around the crucial 5600 levels on the Nifty. The Sensex surrendered more than 400 points from the intra-day highs to end at 18,211, lower by 295 points or 1.5%, and the Nifty shut shop at 5458, down 87 points. The broader underperformed; the midcap index ended at 6662, down 133 points and the smallcap index ended at 8131, down 193 points.

The benchmark indices had touched three-week highs earlier in the day and looked set to register their sixth consecutive day of gains and end the week on a high note before succumbing to volatility in the later part of the day. The Anil Dhirubhai Ambani group (ADAG) group CEO chairman Anil Ambani was questioned on Wednesday by CBI in the widening probe into the 2G scam. The CBI also questioned Essar Group CEO Prashant Ruia in connection with the company's alleged connection with Loop Telecom. Moreover, there are reports of a raid at the offices of Kalaignar TV, a TV channel owned by the family of DMK, sparking worries of political stability at the centre as the DMK is a crucial rally of the Congress at the Centre.

The two-day weekend would also have also forced the market participants' hands as there are apprehensions that the CBI investigations into the telecom debacle could spread deeper and farther. Moreover, the situation also seems to be boiling over in the Middle East, with Bahrain and Yemen seeing incidents of anti-government protests in the aftermath of the successful overthrow of autocratic regimes in Tunisia and Egypt.

On the global market front, Wall Street finished higher on Thursday after a strong manufacturing report overshadowed a bigger-than-expected rise in the number of people applying for unemployment benefits; The Dow gained 30 points to 12,318 and Nasdaq added six points to 2,831. This boosted the sentiment across Asia, with the key benchmark indices in Hong Kong, Indonesia, Singapore, South Korea and Taiwan rising between 0.8% and 2%. And the European indices, including the FTSE, CAC and DAX had edged only marginally lower in mid-morning trades.

The ADAG stocks took it on the chin; RCom and Reliance Capital plummeted by 6.8% each at Rs 93 and Rs 444 respectively, Reliance Infrastructure was hammered by 5.6% at Rs 605 and Reliance Power weakened by 5.7% at Rs 113. Jaiprakash Associates and ONGC were the other significant losers on the BSE. And index heavyweight RIL shed 1.7% at Rs 937. Banking, which was a stellar performer in the previous day's rally, also saw profit-booking. ICICI Bank weakened by 3% at Rs 1025, Axis Bank shed 1.8% at Rs 1292 and SBI lost 0.8% at Rs 2755.

On the other hand, Hindustan Unilever strengthened by 1.9% at Rs 279 to top the gainers list on the BSE. Jindal Steel gained 1.5% at Rs 679 and Cipla added 0.5% at Rs 307.

The market breadth turned weak at close. Out of 2980 stocks traded on the BSE, there were 792 advancing stocks as against 2044 declines.

 

 

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First Published: Fri, February 18 2011. 16:00 IST
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