The Indian market ignored favorable leads from the other Asian markets and tumbled nearly 2% on Friday due to profit taking ahead of the weekend.
The markets across the Asia-Pacific region closed modestly higher after the results of much-awaited stress tests on 19 U.S. banks dispelled uncertainty and speculation surrounding the health of the U.S. banking sector. Investors were relieved that there were no nasty surprises.
Bach home, the inflation rate rose 0.70% in the 12 months to 25 April from 0.57% in the previous week, data released by the Ministry of Commerce and Industry showed. The annual inflation rate was 8.27% during the corresponding week of the previous year.
Massive unloading of long positions ahead of general election results next week dragged down stocks across the board. However, the consumer durable index bucked the declining trend and rose 2.13%, helped by strong gains in Videocon Industries, Blue Star and Gitanjali Gems.
Economic cycle driven metal stocks and rate- sensitive banking stocks were the worst hit after a sharp surge in the past few days. IT stocks extended their losses amid concerns about scrapping of incentives related to outsourcing in the United States. Several sugar stocks such as Bajaj Hindustan, Dwarkesh Sugar, Ponni, Sakthi and Thiru Arroran Sugar closed sharply higher.
The market was very volatile. After showing some initial gains, the benchmarks fell sharply in the afternoon before recovering some lost ground in late trading. The BSE Sensex moved in a range of 12,180-11,765 before finishing at 11,876, down 241 points or 1.98% over the previous close. Meanwhile, the S&P CNX Nifty fell 63 points or 1.72% to 3,621.
On the BSE, the mid-cap index slipped 0.17% and the broad-based BSE 500 index fell 1.44%, but the small-cap index ended up 0.32%.
Wipro (down 6.59%), ICICI Bank (down 5.19%), Reliance Infrastructure (down 5.07%), Sterlite Industries (down 4.93%), Mahindra & Mahindra (down 4.28%), HDFC (down 4.19%) and Reliance Communication (down 4.11%) were the major decliners. Twenty-six out of 30 Sensex stocks ended in the red, while Jaiprakash Associates, Hindustan Unilever, Larsen & Toubro and Grasim Industries closed in positive terrain.
State Bank of India fell 3.06% ahead of its earnings announcement on Saturday. Andhra Bank closed up 0.49% on the back of strong fourth- quarter results. HDFC Bank moved down 2.83% on heavy volume of nearly 14 million shares amid reports about DBS selling its 2.7% holding in the bank.
DLF declined 1.84% on reports about stake selling by promoters to foreign and domestic institutional investors. Jaiprakash Hydro Power drifted down 2.40% after it reported a net loss of Rs.25.52 crore for the fourth quarter ended March compared to a Rs.28.86 crore net profit in the same quarter last year.
Birla Corporation tumbled 4.87% after its net profit declined 18% year-over-year for the 12 months ended March. Petronet LNG rose 2.42% after it tied up with an Australian firm for fuel imports
Among state-owned oil-marketing companies, HPCL fell 2.55%, BPCL slipped 0.14% and IOC moved down 1.84% after crude oil futures rose towards $58 a barrel in Asian trading. Oil explorer Reliance Industries and ONGC also ended in the red, but Cairn India closed up 0.44% on reports that Cairn has sought permission from the government to relinquish its 30% stake in Cairn's Barmer fields in Rajasthan, as royalty and cess make project unviable.
United Spirits slumped 6.70% on reports that Diageo's talks to buy stake in the alcohol maker have hit a roadblock. Consolidated Construction Consortium closed down 2.44% despite bagging a Rs.70 crore new order.
Bharati Shipyard jumped 12.70% after it acquired the 14.89% equity stake in integrated oil-field service provider Great Offshore. Meanwhile, Great Offshore closed down nearly 3%.
Tata Steel tumbled 4.03% ignoring positive reports about improved steel demand in the year to March 2010. Tata Motors declined 1.36% as it prepares to raise Rs.5, 000 crore through a bond issue to refinance the remaining $2 billion (Rs.10, 000 crore) bridge loan it took to acquire Jaguar and Land Rover.
Nestle India closed down 1.44% on saying that workers at its Pantnagar facility are on strike. Sun Pharma slipped 0.22% even as it received a tentative approval from the U.S. Food and Drug Administration to sell alfuzosin hydrochloride tablets.
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