BSE Sensex closes weak; investors shun realty, cap goods

Moneycontrol Bureau

Benchmark indices drifted lower Wednesday, as buyers chose to await cues from the US Federal Reserve before deciding on the next course of action. Renewed weakness in the rupee and tepid fourth quarter earnings from engineering major Larsen & Toubro weighed on sentiment.

The BSE Sensex closed at 20062.24 , down 49.37 points over the previous close. The Nifty shed 19.60 points to close at 6094.50.

Equity investors across the globe are keen waiting for US Federal Reserve chief Ben Bernanke’s speech tonight to see if he will signal a reversal of the monetary easing policy. If the Fed starts raising interest rates, it is expected that investors will start cutting exposure to commodities, especially gold, and plough a part of that money into equities.

Larsen & Toubro’s fourth quarter net profit declined 7 percent year-on-year, weighed down by higher interest cost, and was way below analyst estimates. A one-share-for-two-held bonus issue failed to pacify the market, and the stock fell 6 percent percent to close at Rs 1517.10.

Realty and capital goods shares were the worst performers today, while FMCG, healthcare and IT shares gained as investors sought refuge in defensive sectors.

The rupee fell to a near 6-month low today, and this has raised concerns that foreign investors may be tempted to book profits, fearing further weakness in the currency.

But experts feel the weakness is not specific to India.

"The rupee has depreciated more against the dollar than other Asian currencies, which primarily has to do with the fact that we have moved pretty rapidly in the last couple of days. So yes, we have weakened a bit more than the Asian currencies, but it is not substantially or significantly more," Agam Gupta of Standard Chartered Bank told CNBC-TV18 in an interview.

Berger Paints, Castrol, Glaxosmithkl Consumer, Tech Mahindra and United Spirits were among the key gainers, climbing 3-4 percent.

Adani Power, DLF, L&T, Financial Technologies and Future Retail were the big losers, shedding between 5-7 percent.