RTTNews - After a sharp sell-off in the previous session, the Indian market pulled back further on Thursday amid frantic selling in stocks across the board with the exception of the IT sector.

Investors and funds took profits in overvalued stocks on realization that the market has risen too fast in a short time and a sharp correction is imminent surrounding the forthcoming budget. Considerable amount of selling by foreign funds in the the past few sessions and weak global cues also weighed on market movement.

The realty index plunged nearly 6%, the metal around 5% and power, capital goods and public sector stocks shed more than 3% on an average. While IT stocks bucked the declining trend on stock-specific reports and amid hopes the forthcoming budget would extend the corporate tax holiday granted to export-oriented units and software parks by three more years, healthcare, FMCG, banking and auto stocks ended with modest losses.

After remaining range bound till the mid-session, the BSE Sensex fell to a low of 14,188 before finishing at 14,266, down 257 points or 1.77% from its previous close. Likewise, the S&P CNX Nifty fell 105 points or 2.40% to 4,251, the BSE mid-cap index moved down 2.87% and the small-cap index shed 3.70%. The market breadth on the BSE was extremely negative. Decliners outnumbered advancers by 2094 to 534 and 56 stocks closed unchanged.

Meanwhile, according to data released by the ministry of commerce and industry, the headline inflation rate turned negative for the first time since 1977-78 due to a high base effect and supply side issues that are believed to be temporary in nature. The annual inflation rate based on wholesale prices stood at -1.6% for the week ended June 6 compared to a provisional 0.13% in the previous week and 11.66% during the corresponding week a year ago. Analysts, however, shrugged off concerns about deflation, saying that it is just a statistical effect and will not last for more than two months. In fact, a section of analysts said the negative inflation would have a positive impact on growth.

Among the major decliners, ACC plunged 8.25%, Jaiprakash Associates, Tata Steel, Hindalco and Grasim plummeted over 6% each, NTPC slumped 5.33% and ONGC tumbled 4.87%. Reliance Infrastructure, Larsen & Toubro, Reliance Communication, DLF, BHEL and ICICI Bank were the other prominent losers.

On the other hand, SBI rose 2.33%, Sun Pharma gained 1.54%, Tata Motors added 1.34%, Infosys ended up 0.64%, Bharti Airtel edged up 0.36% and TCS closed up 0.20%.

Amtek Auto declined 1.10% after it decided to evaluate options to restructure debt by amending the terms and conditions of outstanding foreign currency convertible bonds. JSW Steel plunged 9.32% after it denied stake-sale reports.

Spice Communications tumbled 5.37% after it reported a net loss of Rs 1,015.22 crore for the 15 months ended March. Cairn India fell 2.94% amid reports that it will start test runs at its Mangala field next week.

Hindalco Industries slumped nearly 7%, shrugging off reports that it is eying a coal mine in Australia, in a deal worth $70-$80 million. GSS America Infotech America fell 4.93% after the company proposed to acquire a US-based company with revenues of $24 million.

Tech Mahindra rallied 3.84% after it received approval from the U.S. anti-trust authority regarding its Rs 1,154 crore open offer to the shareholders of Satyam Computer Services. Satyam also ended up 2.20%. Sobha Developers edged up 0.79% after it received shareholder nod to raise Rs 1,500 crore from international markets.

Tata Consultancy Services showed a modest 0.2% gain on reports that it is eying e-governance projects at the central and state levels to cope with the downturn. Separately, TCS has said it expanded its presence in Mexico with the opening of a global delivery center in Queretaro.

JetAirways plunged 6% and Kingfisher tumbled over 3%, while SpiceJet jumped nearly 6% after they hiked fuel surcharge by Rs.400/ticket on the back of an over 12% hike in the jet fuel price by state-run oil-marketing companies on June 15.

Four Soft fell 2.49% despite bagging a contract from UK's leading pharma distribution company Polar Speed Distribution. Reliance Communications lost 3.30% following reports that it will roll out sachet pricing for value added services such as caller tunes, news alerts and Internet surfing this month.

HBL Power Systems hit the 5% upper circuit limit after announcing a stock-split for its existing equity shares. Tata Motors rose 1.34% on reports the company will launch its marquee brands, the Jaguar and Land Rover, in the domestic market on June 28.

Dish TV rose 2.57% after its March-quarter net profit narrowed to Rs 78.66 crore from Rs 115.08 crore in the corresponding quarter a year ago. GSFC fell 3.25% despite reporting strong quarterly earnings.

On the BSE, Jaiprakash Associates topped the traded value chart with a total turnover of Rs 841.91 crore followed by Reliance (Rs 329.33 crore), Reliance Capital (Rs 266.12 crore), Unitech (Rs 223.15 crore) and Reliance Natural Resources (Rs 221.17 crore).

Jaiprakash Associates topped the traded volumes chart with trades of 42.26 million followed by Unitech (28.26 million), Satyam Computers (24.42 million), Reliance Natural Resources (23.88 million) and Ispat (19.30 million).

Elsewhere, the other major Asian markets ended in the red on valuation concerns, European stocks were trading lower for the fifty straight day following an unexpected drop in U.K. retail sales and the U.S. futures were last trading mixed, pointing towards a flat opening on Wall Street on Thursday.

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