Sensex ends below 19K; cap goods, IT, oil & gas slip

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Indian benchmarks retreated on Wednesday after a rally was seen in the previous session, dragged down by oil & gas, technology, capital goods, FMCG and cement companies' shares along with HDFC, HDFC Bank, SBI and NTPC. The Nifty was completely flat in the first half of trade but a sell-off in heavyweights in the last couple of hours pulled the 50-share NSE Nifty below the 5700-mark to close at 5,691.05, with a loss of 33 points or 0.58%.

Hemang Jani, senior vice president of Sharekhan said another 100-200 points cut on the Nifty could be possible. "Low flows from FIIs, high commodity pricing and possible policy tightening may lead to a realignment of portfolios, which may go on for a few months. But the downside in the market is limited because it has already started factoring in some of these developments. Probably, another 100-200 point cut on the Nifty could happen," he reasoned.

Laurence Balanco of CLSA too feels that the index could test 5300-5500 support zone in near term. "The Nifty has conclusively broken below the short-term uptrend support drawn off the late November 2010 lows which should result in a thorough test of the 5,300-5,500 support zone in the near-term."

The 30-share BSE Sensex closed at 18,978.32, down 113.73 points or 0.6%. Vineet Bhatnagar managing director of MF Global also expects another 120-points compression on the Nifty. "The foreign institutional investors have sold USD 1.3-1.4 billion in the index futures and cash market," he said.

On the sectoral front, the BSE Capital Goods, IT and Oil & Gas indices fell one percent each. However, the markets were supported by metal and realty companies' shares - respective indices went up 1.7%.

Heavyweights Reliance Industries and ONGC were down 1-1.5%. Engineering firm L&T's shares lost nearly 2%; BHEL and Siemens declined 0.5-1%.

Even IT major Infosys tanked 2.2% followed by TCS and Wipro with 0.5-0.8% fall while HCL Tech outperformed them in December quarter and gained 4%. HCL Tech reported consolidated net profit at Rs 400 crore in Q2, a growth of 20.85% over previous quarter. Revenue increased just by 4.85% to Rs 3,888 crore.

There was a mixed trend in financial space - country's largest bank SBI slipped 2%. HDFC Bank, HDFC, IDFC and PNB were down 0.5-1.6% while ICICI Bank supported the market with 1.1% gain and Kotak Mahindra Bank rose 2.1%.

FMCG major ITC and HUL slipped 0.4-0.7%. ACC and Ambuja Cements declined 1.5-2.6%. In power pack, NTPC, Power Grid and Tata Power went down 0.7-1.1% whereas Reliance Infrastructure rallied 2.8%.

Tata Motors, Hero Honda and Maruti from auto space were down 0.4-1.3% while M&M climbed 0.6%. Bajaj Auto jumped 2% on the back of strong earnings; its Q3 net profit rose 40.42% to Rs 667 crore.

SAIL was top gainer on Nifty with 4.8% rise; Sterlite, Tata Steel, Hindalco and Sesa Goa moved up 1-3%. DLF from realty segment shot up 3.4%.

In midcap space, Manappuram, ARSS Infra, Ruchi Soya, SRF and Opto Circuits rallied 5.5-8.5% while Future Capital, Sintex India, ING Vysya Bank, Bajaj Finance and AIA Engineering lost 3.4-4.4%.

In smallcap space, Tata Coffee surged 15.33% and Sequent Scient rallied 13.85%. Zee Learn, Odyssey Finance and Reliance Broadcast were up 9-12%. However, SE Investments, Sterling Holiday, Sahara One, Centrum Finance and India Securities fell 5-8.5%.

About 1451 shares advanced as against 1428 shares declined on Bombay Stock Exchange.

On the global front, European markets and US index futures were flat, at the time of closing of Indian equities. However, Asian markets ended higher; Shanghai surged 1.86% and Hang Seng rose 1.1%. Nikkei, Kospi and Taiwan gained 0.4-0.9%.