Sensex Sheds 104 Pts As Banks, Power Stocks Drop

The Sensex on 27 august' 2012 fell by 104 points to 17,678.81 on selling in banks, capital goods, metal and power shares amid the logjam in Parliament entering its second week over the coal block allocation issue.

 

The BSE benchmark index opened flat on weak Asian cues but kept sliding down as selling in interest-rate sensitive shares as well IT stocks increased. Besides weak hopes of any immediate reduction of lending rates by RBI, a lower opening in European shares also spoilt the sentiment.

 

After dropping to day's low of 17,662.21, Sensex closed at 17,678.81 - down 104.40 points, or 0.59 per cent over Friday's closing. Across the market, 1,790 stocks closed with losses, wiping off investor wealth worth Rs 42,000 crore today.

 

Refusing to be on the back foot on coal block allocation, Prime Minister Manmohan Singh today rejected the CAG's observations as "misleading" and "flawed" and blamed the Opposition for thwarting his government's efforts to bring a policy of competitive bidding.

 

"While the concerns over the deficit rainfall may now be waning, the debate over the CAG report on coal continues to haunt the political scenario," said Milan Bavishi, Head - Research, Inventure Growth & Securities.

 

A fall in key stocks on the 30-share index including State Bank of India, ICICI Bank, Infosys, L&T, Jindal Steel and BHEL kept the Sensex in negative zone throughout.

 

Losses would have been sharper if it was not for gains in RIL, Bajaj Auto, M&M and Cipla, said traders.

 

Profit-booking ahead of the expiry of August derivatives on Thursday also dampened the sentiment, a broker said.

 

The rupee, which was last trading weaker by 10 paise at around 55.60 a US dollar in spot market, also did not provide any relief to stock market, said experts.

 

The BSE-Realty sectoral index was the biggest loser as it ended 2.42 per cent down with stocks of Unitech, Indiabulls Real Estate, DLF, HDIL and Prestige Estate ending lower.

 

The 50-share NSE Nifty index also declined by 36.45 points to end at 5,350.25. 

 

Most Asian stocks, except in Japan, ended lower on reports that latest data showed a 5.4 per cent decline in profit from China's major industrial enterprises for July.

 

China's Shanghai Composite Index tumbled by 1.74 per cent while others including Hang Seng, Strait Times, Kospi and Taiwan weighted indices also ended lower.

 

European markets, barring UK which was closed today for a bank holiday, were quoting slightly weak in afternoon deals.

 

The CAC was down by 0.14 per cent and DAX by 0.08 per cent.

 

Back home, 11 out of 13 sectoral indices closed in the red while only BSE-Oil&Gas and BSE-FMCG finishing higher. Out of 30 Sensex-based scrips, 19 shares closed lower.

 

Second-line shares were at the receiving end, indicating lack of buying support from retail investors in the current uncertain global as well as local scenario. The BSE-Midcap and BSE-Smallcap indices closed around one per cent each lower.

 

Morgan Stanley in a research report said that along with the adverse domestic conditions, the external environment has also deteriorated further.

 

Talking about Nifty, Kishor P Ostwal, CMD, CNI Research Ltd. said: "Nifty broke the first support level of 5380 and now heading for another support level of 5330. Nifty will not cross 5500 and not break 5300 which was due to call writing of 5500 and put writing of 5300".

 

Major losers from the Sensex were Jindal Steel (5.16 pc), BHEL (2.70 pc), SBI (2.58 pc), ICICI Bank (2.12 pc), Tata Motors (1.99 pc), Sterlite (1.87 pc), Maruti Suzuki (1.82 pc), Tata Power (1.68 pc), L&T (1.66 pc) and Infosys (1.42 pc).

 

However, M&M firmed up by (1.35 pc) and RIL (0.68 pc).

 

Among the sectoral indices, besides BSE-Realty which was the biggest loser, the BSE-Bankex shed 1.81 per cent, followed by the BSE-CG (1.61 pc), the BSE-Metal (1.39 pc), the BSE-Power (1.27 pc) and the BSE-IT (0.92 pc).

 

The total turnover dropped further to Rs 1,747.67 crore from the last Friday's level of Rs 1,940.33 crore.

 

FIIs remained net buyers for the current month so far and they pumped in Rs 226.06 crore on last Friday as per provisional data with stock exchanges.

 

(PTI)