Sensex falls nearly 2 per cent; capital goods stocks plunge

Mumbai, April 20: Below-expectation quarterly results coupled with negative global cues led to a benchmark index of the Indian equities markets, the 30-scrip BSE Sensitive Index (Sensex), closing 556 points or nearly 2 percent down on Monday. The Sensex had plunged by 620 points in the intra-day trade as interest rate-sensitive stocks like capital goods, automobile and banks fell. Fears of more retrospective tax cases impacted the sentiments of the foreign investors — which also dented the rupee’s value. The rupee closed at 62.88 per dollar against 62.33 on Friday. The wider 50-scrip Nifty of the tiol Stock Exchange (NSE) also closed deep in the red. It closed 158 points or 1.83 percent down at 8,448.10 points.

The Sensex of the S&P Bombay Stock Exchange (BSE), which opened at 28,525.65 points, closed the day’s trade at 27,886.21 points, down 555.89 points or 1.95 percent from the previous day’s close at 28,442.10 points.

The Sensex touched a high of 28,539.46 points and a low of 27,802.37 points in the intra-day trade. According to Angel Broking, the weakness observed in the Indian markets was due to the negative global cues such as last week’s sell-off in the Chinese futures, which fell sharply amid concerns about new trading regulations.

The fincial situation of the Greek debt crisis and its fall-out on the Eurozone economies and also concerns about a string of disappointing fourth-quarter results added to the negative sentiments. In Monday’s trade, all 12 sector-based indices of the BSE closed the day’s trade in the red. Stocks of capital goods, automobile, bank, information technology (IT), fast moving consumer goods (FMCG), oil and gas, metal, healthcare and technology, entertainment and media (TECK) came under heavy selling pressure.

The BSE S&P capital goods index plunged by 377.18 points. This was followed by automobile index which dropped 344.83 points, bank index sank 285.76 points, FMCG index fell by 232.50 points and FMCG index declined by 224.51 points.

The S&P BSE oil and gas index decreased by 187.36 points, metal index was lower by 180.28 points, healthcare index dived by 158.76 points and TECK index was down by 125.25 points. “Markets continued their downtrend today with stocks across sectors coming under selling pressure,” said Dipen Shah, head of private client group research, Kotak Securities.

According to Shah, expectations of subdued quarterly results, uncertainty over Greece, weak Asian markets and the uncertainty over passage of important bills in parliament all impacted investor sentiments. “Weak FIIs (foreign institutiol investors) flows over the past few days have also impacted markets,” Shah said. “Going ahead, developments on Greece, passage of important bills in parliament, quarterly results and expectations on monsoons, rate cuts will decide the direction of the markets.”

Vinod ir, head-fundamental research, Geojit BNP Paribas Fincial Services said the markets continued their correction as the fourth quarter numbers have not brought any positive surprises.

“With Sensex (earnings per share) expectation brought down since last month, the market is concerned at downgrading of 2015-16 numbers by 3-5 percent (Sensex EPS),” ir said. “In the meantime, market would also eagerly watch the second half of the budget session which has started today (Monday). If the government successfully passes key bills like land and GST (goods and services tax) in the ongoing session, market could see some positive momentum,” ir added.

Out of the 30 scrips that comprise Sensex, 28 closed in the red in Monday’s trade. The only Sensex gainers on Monday were Sun Pharma, up 0.66 percent at Rs.1,044.10; and ICICI Bank, up 0.31 percent at Rs.311.05. The losers included Reliance Industries, down 4.46 percent at Rs.885.55; Hero MotoCorp, down 3.96 percent at Rs.2,314.70; Cipla, down 3.03 percent at Rs.659.70; Mahindra and Mahindra (M&M), down 2.96 percent at Rs.1,188.05; and Axis Bank, down 2.94 percent at Rs.518.45.

Among the Asian markets, Japan’s Nikkei went down by 0.09 percent, while Hong Kong’s Hang Seng closed lower by 2.02 percent. Chi’s Shanghai Composite Index lost by 1.61 percent. In Europe, London’s FTSE 100 was up by 0.73 percent and France’s CAC 40 was higher by 0.46 percent. Germany’s DAX Index was trading up by 0.46 percent at the closing in the Indian markets. (IANS)