Thursday, the Indian market snapped its 8-day rally on profit taking amid political uncertainty on the outcome of the month-long parliamentary elections. Investors fear that an absence of clear majority for neither Congress nor the BJP will slow the pace of reforms.
Additionally, apprehensions over the quality of corporate earnings for the March quarter led to heavy unwinding of long positions as the benchmark Sensex jumped 38 percent since its lows on March 9.
Meanwhile, the inflation rate eased further to 0.18 percent for the week ended April 4, the lowest ever in the last three decades, giving more room to the RBI to cut interest rates when it reviews its monetary policy last week. The index of wholesale inflation was 0.26% in the previous week and 7.71% in the same week a year ago.
After trading choppily in a range of 11,367-10,900, the BSE Sensex closed near the day's lows at 10,947, down 337 points or nearly 3% over the previous close. Similarly, the S&P CNX Nifty moved down 115 points or 3.29% to 3,369.
Small-caps and mid-caps bore the brunt of the selling. While the broad-based BSE 500 index fell 3.52%, the mid-cap index tumbled 4.53% and the small-cap index slumped 4.72%. On the BSE, the market breadth was extremely negative, with decliners outnumbering advancers by 1742 to 851.
Sector-wise, realty and metal stocks were the worst hit. Healthcare, IT and auto stocks showed modest losses, while defensive FMCG stocks bucked the declining trend, with the FMCG index rising 1.92%.
Among the major decliners, Tata Motors plunged 13.50%, Reliance Infrastructure plummeted 9.36%, DLF slumped 8.63%, Tata Steel tumbled 8.25% and Jaiprakash Associates fell 8.0%.
Hindalco Industries, Ranbaxy Laboratories, Reliance Communication, Larsen & Toubro, Sterlite Industries, Reliance Industries and Mahindra & Mahindra were the other prominent losers.
However, ITC rallied 3.21%, Wipro advanced 2.84%, Sun Pharma rose 2.05%, Hindustan Unilever gained 1.51%, Maruti Suzuki added 0.45% and ACC moved up 0.36%.
Satyam Computer and Tech Mahindra tumbled over 5% each even as the Company Law Board approved Tech Mahindra's Rs.58-a share offer to acquire a controlling stake in fraud-hit Satyam.
Rallis India surged up 7.09%, Supreme Industries rallied 5.59% and Honeywell Automation advanced 4.17% on reporting better-than-expected results for the March quarter. Larsen & Toubro slumped 5.38% even as the company said it anticipates a healthy 25-35% growth in its order inflows in the FY10.
Blue Dart Express fell 3.73% after its net profit fell nearly 62% year-over-year for the three months ended March. BASF India declined 4.43% even as its standalone net profit rose 24% for the March quarter.
Among aviation stocks, Kingfisher plunged 12.48% and JetAirways plummeted 10.71%, but SpiceJet closed up 0.62% after domestic air traffic fell 12% to 99.82 lakh passengers in the March quarter year-over-year. Separately, state-owned oil companies raised prices of jet fuel by about 6.7% for the third time in a month.
In the oil and gas sector, HPCL and BPCL gained nearly 4% each, but IOC drifted down 0.55%, Reliance Industries tumbled 4.88% and ONGC fell 4.80%.
Unitech plunged nearly 10% on reports that it will raise nearly Rs.1, 250 crore through private placement of shares to qualified institutional investors. DLF slumped 8.63% following reports that it is likely to resell its apartments at New Town Heights, Gurgaon, and Garden City, Chennai, at a discount.
Natco Pharma plunged 8.04% on signing a pact with Dr Reddy's Laboratories for the development, manufacture and supply of a generic oncology drugs, used for cancer treatment
Pidilite Industries fell 2.80% after it has repurchased and extinguished foreign currency convertible bonds worth $40 million issued in December 2007 and listed on Singapore Exchange Securities Trading.
Petron Engineering Construction shed its early gains and closed flat after it bagged an order worth Rs.4.50 crore from Vedanta Aluminum for supply of rodding shop equipment for its aluminum smelter plant expansion project at Jharsuguda, Orissa.
Reliance Capital topped the traded value with a turnover of Rs.448.27 crore followed by Reliance (Rs.346.01 crore), Unitech (Rs. 294.72 crore), Reliance Infra (Rs.263.62 crore) and ICICI Bank (Rs.205.65 crore).
Unitech topped the traded volume with trades of around 5.94 crore shares followed by Reliance Natural Resources (3.06 crore), Suzlon (2.87 crore), Karuturi Global (2.78crore) and Cals Refineries (2.34 crore).
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