Feb 22, 2012 04:44 PM IST | Source: Moneycontrol.com

Sensex ends 283 pts down on profit taking; SBI, DLF fall 8%

The market on Wenesday saw its biggest fall in the last 16 sessions led by heavy sell-off in banks, metals, telecom and infrastructure stocks. Weak European cues after less-than-expected German's PMI and jobs data too dented the market's sentiment in last hour of trade.

Sensex ends 283 pts down on profit taking; SBI, DLF fall 8%

The market on Wenesday saw its biggest fall in the last 16 sessions led by heavy sell-off in banks, metals, telecom and infrastructure stocks. Weak European cues after less-than-expected German's PMI and jobs data too dented the market's sentiment in last hour of trade.

The NSE benchmark fell below the 5500 level before closing down 101.80 points or 1.82% at 5,505.35. Meanwhile, the BSE benchmark Sensex dropped 283.36 points or 1.54% to 18,145.25.

Experts feel profit booking may be one of the reasons behind today's fall as the Nifty had rallied more than 500 points since the previous biggest correction of 117.4 points to close at 5087.3 on January 30, 2012. The rally was completely liquidity driven as foreign institutional investors have been pumping in more and more money in emerging markets (they bought over USD 4.5 billion worth of shares since January) and not because of any great change in fundamentals, experts assert.

Anish Damania, business head of institutional equities at Emkay Global Financial Services Ltd believes that the downward cycle for the market is not over and the valuation cycle with respect to interest rates is way ahead. Therefore, the market has to correct to a large extent of the entire rise over the next six months.

Damania has advised investors to book profits in infrastructure, banking and financial stocks where there has been a massive rally.

European markets like France's CAC, Germany's DAX and Britain's FTSE were down 0.4-0.9% after German's weak economic data. February Flash Manufacturing PMI came in at 50.1 while forecast was 51.5 and in January it was at 51. German's Flash Composite PMI Jobs Index was weakest since March 2010, which came in at 51.7 in February as against 52.9 in January.

Back home, all sectoral indices ended in the red barring IT. The BSE Realty Index hit quite badly, falling 6.8%. Metal, Power and Bank indices were down around 4% while IT Index rose 0.45%.

Shares of country's largest lender SBI got slaughtered heavily, falling 8% on asset quality concerns post rumours that the bank may lend some money to debt laden Kingfisher Airlines. ICICI Bank tanked 3.4% and Axis Bank was down 5.5%. HDFC declined 2% while HDFC Bank flat with positive bias.

Metals stocks lost their shine; Sesa Goa dropped 4% after sources reclaimed that I-T Dept disallowed Rs 246 crore tax deductions of the company. Tata Steel, Jindal Steel, Sterlite and Hindalco were down 4-6.6%.

Index heavyweights Reliance Industries and L&T went down 1-1.5%; Bharti Airtel tumbled over 3%.

Power related stocks like BHEL and Tata Power fell over 3.5%. Shares of major realty firm DLF tanked nearly 8%.

However, ITC, Infosys, ITC and Sun Pharma bucked the trend, rising 0.5-1.5%.

The broader markets too caught in bears' grip - the BSE Midcap Index was down 3.5% and Smallcap down 3.2%. About three shares declined for every share rising on the BSE.

In the second line shares, Indiabulls Power, DB Realty, IRB Infrastructure, GMR Infrastructure, Adani Power and Voltas were down 8-12%. Lanco Infratech plunged 17%. Syndicate Bank and Vijaya Bank fell 8%.

Volume was highest among last few sessions - total traded turnover was more than 2.87 lakh crore.

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At 14:39 hours IST: Sensex sheds over 200 pts; broader markets down 2.5%

The Sensex shed more than 200 points in afternoon trade, weighed down by SBI, Reliance Industries, ICICI Bank and Bharti. Metals, realty, capital goods and power stocks too were down. The BSE benchmark was down 243 points to 18,185.39 and the NSE benchmark slipped 88 points to 5,519.25.

Market veteran Sanjay Dutt, director of Quantum Securities believes the risk-reward ratio is not favourable for investing in markets right now. He feels the market is likely to see 5% downside from current levels after the recent sharp upmove.

SBI, Sterlite Industries and DLF were top losers among the largecaps, falling 6-7%. Shares of country's largest telecom operator Bharti tanked 4%.

Index heavyweights ICICI Bank and Reliance Industries plunged 2.5% & 1.3%, respectively. Metals stocks melted down - Hindalco, Tata Steel and Jindal Steel fell 3-4%.

Among others, Tata Power, BHEL, NTPC, M&M and GAIL were down 2-3%. HDFC and L&T tumbled 1-1.6%.

However, Infosys, TCS, ITC and Wipro bucked the trend, gaining 0.5-1%.

Infrastructure stocks were under pressure today - IVRCL, Adani Power and Indiabulls Power tanked over 8%.

The broader markets like BSE Midcap and Smallcap indices were down over 2.5%.

At 13:53 hours IST: Nifty in narrow range; Sterlite, SBI top sell list

The Nifty was moving a narrow range of 5580-5600 since morning trade due to lack of major news globally as well as locally. Even European markets were flat in an early trade. The BSE benchmark declined 33 points to 18,395.46 and the NSE benchmark fell 17 points to 5,590.10.

Brent crude was trading near to USD 122 a barrel. It seems, however, that the market is not so much worried about rising crude oil prices.

Among technology stocks, Infosys gained 1.6% and TCS rose 2.3%; Wipro climbed just 0.5%. Index heavyweights Reliance and ONGC were up 0.4% & 1.8%, respectively.

In the capital goods space, BHEL surged over 2% while L&T moved up just 0.7%.

Sterlite Industries, a Vedanta Group company, topped the selling list, falling over 5% after yesterday's reports that the Sesa Goa may be merged with the company as a part of restructuring. In the metal space, Jindal Steel, Tata Steel and Hindalco were down 0.7-2.5%.

Meanwhile, shares of country's major lenders SBI and ICICI Bank tumbled 4.6% and 1.3%, respectively. Investors are more worried about asset quality of SBI post reports that the bank is likely to provide loan to debt laden Kingfisher Airlines for running its operations.

Index heavyweight Bharti Airtel fell nearly 2% and realty major DLF tanked 3.5%.

Stocks in news

Corporate Affairs Ministry says cement companies cartelisation case is under review. Ambuja Cements and ACC were down 1-1.5%.

Jubilant Life Sciences rose 3.5% as its arm received 4 orders worth USD 90 million

Rohit Ferro Tech gained 2.5% as the company alloted 2 crore shares to promoters on preferential basis at Rs 60/share.

BPCL jumped 3% after Shell made offer to buy Cove Energy at USD 1.5 billion. Cove Energy has 8.5% stake in Mozambique block, wherein BPCL holds 10% stake that now valued at Rs 248/share.

At 12:13 hours IST: Sensex moderately lower; oil & gas, IT support

The market continued to trade moderately lower due to fall in SBI and ICICI Bank. Index heavyweights, however, Reliance, Infosys, ONGC and TCS were helping the market to stay near the 5600 level.

The BSE benchmark was down 39.44 points to 18,389.17 and the NSE benchmark slipped 20.20 points to 5,586.95.

Shares of SBI, India's largest lender, fell 4% on asset quality concerns after reports that the bank is lending some money to Kingfisher Airlines (KFA) for operational expenses. I-T authorities had earlier frozen the airline's bank accounts. SBI had already restructured loans worth Rs 1,500 crore (given to one company - that accounts for as much as one fifth of fresh slippages in last quarter) in the third quarter of FY12 to maintain its asset quality.

ICICI Bank dropped nearly 2%. Among metals stocks, Sterlite Industries fell 3.5% for the second consecutive session today. JSPL and Tata Steel were down 1.5-2.5%.

Shares of country's largest realty firm DLF tanked 4%. Among others, L&T and Bharti Airtel fell 1-1.5%.

However, major largecaps like Reliance, TCS, Infosys, ITC, HDFC Bank, BHEL and ONGC gained 0.7-1.9%. Sun Pharma and Hero Motocorp were up 1.6%.

Stocks in news

Tata Communications gained nearly 5% as the company is going to announce the biggest partnership to date tomorrow.

IOB allots 17.1 crore and 3.09 crore equity shares to GoI and LIC, respectively at Rs 97.80/sh via preferential issue. The stock fell 1.5%.

Taj GVK gained 1.5% as the company is looking to raise Rs 70-75 cr via equity placement, reports CNBC-TV18 quoting sources.

At 10:25 hours IST: Volatile Nifty falls below 5600; SBI, ICICI Bank, L&T slip

The Nifty slipped below the 5600 level amid choppy trade, weighed down by banks and metals stocks. L&T and Bharti Airtel too were under pressure. However, oil & gas, technology and auto stocks were supporting the market. The Sensex fell 21 points to 18,407.33 and the Nifty slipped 11 points to 5,595.80.

Anil Manghnani of Modern Shares & Stock Brokers says investors need to be a little more cautious right now because volatility will increase based on the events at hand. The hefty premium indicates the market is getting too long and more and more shorts are getting sucked out of the system, he said in an interview to CNBC-TV18.

Shares of country's largest lender SBI fell more than 3% after Hindustan Times reports that Kingfisher Airlines will get Rs 1650 crore relief package from SBI. ICICI Bank too was down 1.8%.

Among others, Bharti, M&M, HUL, Tata Steel, DLF, Sterlite, NTPC and Jindal Steel dropped 0.8-1.9%.

However, shares of oil & gas majors and index heavyweights Reliance Industries and ONGC were up 1% & 2.6%, respectively.

Technology stocks like TCS, Infosys and Wipro gained 0.4-1%. Among auto stocks, Hero Motocorp, Tata Motors, Bajaj Auto and Maruti Suzuki climbed 0.3-0.9%.

In the capital goods space, BHEL rose 0.6% while L&T tumbled 1.5%.

At 9:19 hours IST: Nifty holds 5600 amid choppy trade; ONGC shoots up 4%

The Sensex opened with 50 points gap up on Wednesday, while the Nifty stayed above the 5600 level , supported by auto, capital goods, FMCG and metals stocks. However, the fall in banks limited the upside.

The BSE benchmark was up 43.52 points at 18,472.13 and the NSE benchmark rose 8.35 points to 5,615.50.

Among frontliners, ONGC up 4% ahead of EGoM meeting on for divestment on February 24.

Sterlite Industries gained 2.65% after yesterday's sell-off.

Among others, SAIL, Tata Steel, BHEL, Reliance Power, Reliance Communications, Reliance Infrastructure, Coal India and PNB were supporting the market.

However, ACC, Ambuja Cements, Infosys, TCS, ICICI Bank and SBI were down about 0.5% in early trade.

The CNX Midcap Index rose 41 points to 8,021. About 3.5 shares advanced for every share rising on the National Stock Exchange.

In the second line shares, Indiabulls Power, Lanco Infratech, Suzlon Energy and Adani Power climbed 1-3%.

Financial Technologies rose nearly 2% as its promoted company MCX launched its IPO today.

Kingfisher Airlines was up 2.4% as Hindustan Times reports that company will get Rs 1650 crore relief package from SBI. However, SBI says it cannot confirm loan to KFA due to client confidentiality. United Breweries Holdings gained 2.8%.

Firstsource Solutions shot up 4.5%. Allahabad Bank gained nearly a percent as its board members will meet today to consider issue of shares on preferential basis.

However, Essar Oil and DCB fell around 1.5%.

On the global front, Asian markets mixed on Wednesday. Shanghai, Nikkei and Taiwan were marginally higher while Hang Seng and Straits Times fell 0.3-0.6%.

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