RTTNews - Continued irrational pessimism over the Union Budget, weak global cues on worries over economic recovery and cautious undertone ahead of the upcoming earnings season dragged the Indian market down by another 3% on Wednesday. Investors gave little attention to reports that state-run NHPC will hit the market with its initial public offering of shares in August.
Realty stocks bore the brunt of the selling, as reflected by the 9% decline by the realty index after the budget failed to come up with specific proposals for the housing sector. Capital goods, metal, banking, power and consumer durable stocks followed after rising sharply in the run-up to the budget. The auto and FMCG indexes ended with modest losses amid selective buying on hopes of improved demand from the rural markets.
The benchmark BSE Sensex opened lower at 14,040 and hit a low of 13,702 before finishing at 13,769, down 401 points or 2.83% from its previous close. Likewise, the S&P CNX Nifty fell 123 points or 2.93% to 4,079 and the BSE small-cap and the mid-cap indexes tumbled around 3.7% each. The market breadth on the BSE was extremely negative, as decliners outnumbered gainers by 1980 to 563, with 59 stocks closing unchanged.
Tata Steel(down 8.93%), Sterlite Industries(down 8.38%), DLF(down 7.68%), Reliance Infrastructure(down 7.04%), Larsen & Toubro(down 5.84%), ICICI Bank(down 5.82%), Jaiprakash Associates(down 5.58%) and BHEL(down 4.19%) were the top losers.
On the other hand, ACC, Maruti Suzuki, Hero Honda, Grasim, NTPC and Tata Motors closed with notable gains.
Stocks in the education sector tumbled after the government did not accord a priority sector status for the industry. Navneet Publications tumbled over 4%, Aptech plunged 6.42%, Educomp Solutions plummeted 9.47%, Edserv Softsystems fell nearly 5% and NIIT slumped 8.25%.
Select cement companies such as ACC, Ambuja Cement, UltraTech, India Cement and JK Lakshmi Cement as well as Maruti Suzuki, Hero Honda, Ashok Leyland and Tata Motors from the automotive sector closed modestly higher on expectations that the government's focus on the farm sector would boost demand for their products.
Metal stocks melted on concerns about demand contraction for industrial metals. Tata Steel and Sterlite plunged over 8% each, Ispat Industries plummeted 7.96%, JSW Steel slumped 6.71%, Jindal Saw tumbled 5.26%, NALCO fell 3.71% and Hindustan Zinc declined 2.55%.
TRF shed nearly 4% after it inked an agreement to acquire a 51% stake in Sri Lankan company Dutch Lanka Trailer Manufacturers, a world class trailer, for a consideration of $8.67 million. Tulsi Extrusions tumbled 4.64% even as it settled a litigation filed by Vasant Waman Wani out of court.
NALCO fell 3.71% amid reports that it is facing difficulties at its Angul captive power plant due to a shortage of coal. Tulip Telecom fell 2.81% on reports that it plans to restructure its debt to cut interest costs and increase profitability of its operations.
Banking stocks closed mostly lower after SBI chairman O.P.Bhatt said on Tuesday that interest rates could harden six months down the line. However, IndusInd Bank jumped over 7% after its June quarter net profit rose over 3 times year-over-year.
Oil explorer ONGC fell 3.89%, Cairn plunged 6.23% and Reliance Industries ended down 1.40% after crude oil price dropped 2% in New York trading overnight. Hindustan Unilever and Godrej Consumer Products fell over 1% and 4%, respectively amid the execution of block deals on the stock exchanges.
On the BSE, Reliance topped the traded value chart with a turnover of Rs 345.28 crore, followed by Unitech (Rs 252 crore), Tata Steel (Rs 202.68 crore), Educomp Solutions (Rs 188.91 crore) and Reliance Infrastructure (RS 186.92 crore).
Unitech topped the traded value chart with trades of 36.42 million shares, followed by Cals Refineries (26.12 million), Suzlon (17.99 million), Ispat (12.52 million) and Satyam Computer (12.46 million).
Elsewhere, the other Asian markets ended in the negative territory following Wall Street losses, European stocks were trading mixed in early trading ahead of the earnings season in the U.S. and U.S. stocks were set for a lackluster opening in New York Wednesday morning.
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