Sensex, Nifty Hit New Highs, Retreat After SC Coal Ruling

Indian markets hit new highs today but the Supreme Court's ruling on coal block allocations triggered a wave of selling, espcially in metal shares, after which the Nifty surrendered gains to end in the red while the Sensex limped to a new peak on closing with its 17-point rise.

The S&P BSE Sensex, which was up by over 210 points at mid-session after it hit new life high of 26,630.74, washed out major part of early gains. It managed to settle in the green, up by 17.47 points, or 0.07 percent, at 26.437.02. On a closing basis, this is higher than 26,420.67 hit on August 19.

The wide-based 50-issue CNX Nifty of the NSE also recorded its fresh intra-day historic high of 7,968.25, but came off from the new peak on late selling to end at 7,906.30 -- a fall of 6.90 points or 0.09 per cent. On intra-day basis, the Nifty crossed previous peak of 7,929.05 hit on August 22.

The Supreme Court today held that all coal block allocations made since 1993 till 2010 before pre-auction era during previous NDA and UPA regimes have been done in an illegal manner by an "ad-hoc and casual" approach "without application of mind".

As a result, metal stocks like Jindal Steel, Hindalco, Bhushan Steel, Tata Steel, Sesa Sterlite, JSW Steel, Hindustan Zinc, SAIL and NMDC closed down with 1.89-13.97 per cent loss.

Besides metal stocks, realty, power, banking and capital goods counters too attracted profit-booking.

Had there not been smart rise in TCS, ITC, HDFC, Infosys, HUL, M&M, Dr Reddy's Lab, Maruti Suzuki and Hero MotoCorp, the Sensex too would have closed deep in the red.

"Market sentiment was strong till mid-session, however, post the Supreme Court's decision, stating coal allocation since 1993 till 2010 as illegal, triggered strong selling in select stocks like Hindalco and JSPL. Other sectors including power and some mid caps also followed suit," said Nidhi Saraswat, Senior Research Analyst, Bonanza Portfolio.

Globally, Asian markets mostly rose Monday, while the dollar hit multi-month highs against the yen and euro after the US Federal Reserve chief seemed to indicate a shift towards an interest rate rise sooner than expected.

Key benchmark indices in Japan, Hong Kong, Singapore, South Korea and Taiwan firmed up by 0.11 per cent to 0.48 per cent while China's main index moved down by 0.51 per cent.

European markets were trading higher after comments from European Cental Bank President Mario Draghi suggesting that further stimulus could be on the way for the region. Indices in France and Germany rose by 0.08 per cent and 1.05 per cent. The UK market was closed for a bank holiday.

Turning back to the domestic market, 16 scrips out of the 30-share Sensex pack ended lower while others closed higher.

Major gainers were TCS (2.42 per cent), HUL (2.09 per cent), Dr Reddy (2.04 per cent), Hero Motocorp (1.88 per cent), Maruti Suzuki (1.71 per cent), BHEL (1.67 per cent), ITC (1.64 per cent), Cipla (1.58 per cent), M&M (1.31 per cent), HDFC (1.07 per cent) and Bharti Airtel (1.07 per cent).

However, Hindalco fell by 9.56 per cent, Tata Steel 4.79 per cent, Sesa Sterlite 3.89 per cent, Tata Power 3.42 per cent, ICICI Bank 1.52 per cent, Axis Bank 1.21 per cent and Gail India 1.18 per cent.

Among the S&P BSE sectoral indices, Metal fell by 4.34 per cent, Realty 2.01 per cent, Power 1.24 per cent and Bankex 0.89 per cent.

The total market breadth remained negative as 1,624 stocks finished lower, 1,393 stocks ended higher while 82 ruled steady. Total equity turnover rose to Rs 2,887.96 crore from Rs 2,841.43 crore on last Friday.

Meanwhile, Foreign Portfolio Investors (FPIs) bought shares worth a net Rs 302.06 crore on last Friday as per provisional data from the stock exchanges.

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