Sensex, Nifty See Biggest Drop in 20 Days on Capital Outflows

Equity benchmarks today logged their biggest drop in 20 days with the Sensex slipping below the 26,000 mark and the Nifty ending at 7,721.30 on caution due to the expiry of monthly derivative contracts and fund outflows after the US Fed's move to trim its bond buying programme hit sentiments.

Banking, power, consumer durable and capital goods stocks attracted profit-selling. ICICI Bank and Maruti Suzuki shares dropped even after in-line quarterly results, said brokers.

The BSE 30-share Sensex today resumed better and moved side ways in a narrow range till mid-session. However, it met with strong resistance and gradually declined to end at 25,894.97, a fall of 192.45 points or 0.74 per cent. This is its biggest fall since July 11 when it slipped 348.40 points.

The 50-issue CNX Nifty of the NSE dipped by 70.10 points, or 0.90 per cent, to 1-1/2-week low of 7,721.30. The Nifty's drop today was also its steepest since July 11 (down 108.15 points).

Losses in HDFC, ITC, Tata Motors, M&M, TCS, HUL, Wipro, Maruti Suzuki and BHEL weighed on indices.

Globally, the US Fed's decision to continue with gradual tapering and reducing asset purchases by another USD 10 billion/month, triggered concerns that flows into emerging markets would slow. Besides, risk-aversion was seen due on reports that Argentina has failed to strike a deal to avert its second default in more than 12 years.

Asian stocks finished mixed. Key benchmark indices in Japan, South Korea and Taiwan closed lower while from China, Hong Kong and Singapore concluded higher.

Foreign Portfolio Investors sold shares worth a net Rs 381.66 crore yesterday, per provisional data from bourses.

Jayant Manglik, President-retail distribution, Religare Securities said: "Benchmarks were seen losing close to a per cent in a volatile session of the F&O expiry day. After the initial range bound move, selling pressure in the banking, power and consumer durables space triggered the breakdown. Mainly, weak global cues and lack of buying interest among the participants led today's fall."

In Europe, markets were trading lower as indices in France, Germany and the UK eased by 0.24 per cent to 0.94 per cent.

Back home, 24 scrips out of the 30-share Sensex pack ended lower while the remaining six finished higher.

Major losers were NTPC 3.01 per cent, Axis Bank 2.52 per cent, M&M 1.73 per cent, Tata Power 1.66 per cent, HDFC 1.60 per cent, Larsen & Toubro 1.33 per cent, SBI 1.26 per cent, Wipro 1.23 per cent and ICICI Bank 1.11 per cent.

BHEL 1.10 per cent, Maruti Suzuki 1.07 per cent, HUL 1.04 per cent and Tata Motors 0.99 per cent also slipped.

Cipla rose 1.92 per cent, Tata Steel 1.56 per cent and Coal India 0.49 per cent, among the six Sensex gainers.

Among S&P BSE sectoral indices, Power fell by 1.35 per cent, Bankex 1.18 per cent, Consumer Durables 0.98 per cent, Capital Goods 0.84 per cent, Auto 0.62 per cent, FMCG 0.55 per cent and Teck 0.44 per cent.

Total market breadth remained negative as 1,492 stocks ended in the red, 1,431 finished in the green while 116 ruled steady. Total turnover dropped to Rs 2,921.30 crore from Rs 3,253.14 crore yesterday.

Emerging story. Watch this space for updates as more details come in
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