Mumbai: The profit booking continued for the second consecutive session on Monday especially after the Nifty hit 5800 and Sensex touched 19000 levels last week. The fall in global markets on weak economic growth and endless Eurozone concerns also dented sentiment throughout the session.
The 30-share BSE benchmark dropped 229.48 points or 1.21 per cent to close at 18,708.98, weighed down by oil & gas, capital goods, technology, banking and auto stocks. Meanwhile, the 50-share NSE benchmark ended below the 5700 level for the first time in last six sessions; it was down 70.95 points or 1.23 per cent to 5,676.
According to fundamental analysts, Monday's fall was attributed to weak global cues while technical analysts believe the fall was inevitable as benchmarks rallied quite sharply since last month on strong inflow of foreign money.
Saurabh Mukherjea, head of equities at Ambit Capital says he would not attribute this to national factor. "This is more of a global concern. I don't think the government has anything done wrong in the couple of months to precipitate today’s correction," he adds. He expects more reforms coming in the next few weeks.
Indian rupee also continued downtrend for the second straight day, falling by 1.05 per cent or 55 paise to 52.40 against the US dollar (at 15:31 hours IST). On the global front, France's CAC and Germany's DAX dropped 1.35 per cent each on concerns over political and economic uncertainty in Greece and Spain despite the launch of euro zone’s permanent bailout fund, the European Stability Mechanism (ESM).
Citi's Jurgen Michels says it is highly unlikely that Spain will be able to fund itself on relatively low rates and with no improvement in the Greek situation, he adds that the IMF and the European nations are locked in a dispute over contributing to ease the debt scenario in Greece. Asian markets too closed 0.5-1 per cent lower despite strong US jobs data.
Back home, index heavyweight Reliance Industries crashed 4.51 per cent on downgrade by foreign research firm. Morgan Stanley has downgraded the stock to underweight, citing valuations, lack of near-term triggers and expectation of weaker refining and petrochemical margins. The company will declare its second quarter numbers of FY13 on October 15. Realty major DLF plunged over 7 per cent on concerns over corporate governance issue.
Telecom stocks like Bharti Airtel, Reliance Communications, Tata Teleservices and Idea Cellular gained 2-4.5 per cent after Law Minister Salman Khurshid (after a meeting of empowered group of ministers) said one-time spectrum fee would be charged beyond 4.4 MHz. "One-time spectrum fee would be on prospective basis and not be charged on retrospective basis," he said.
Engineering majors Larsen & Toubro and BHEL were down 3-3.44 per cent. Commercial vehicle maker Tata Motors and private power producer Tata Power fell over 2.5 per cent. Country's largest lender State Bank of India tanked 3 per cent while its rival ICICI Bank was down 1.4 per cent.
Infosys, India's second largest software services exporter lost 1.5 per cent ahead of September quarter earnings that will be announced on Friday. TCS and Wipro were down 1-2 per cent. State-run oil & gas producer ONGC declined 2 per cent and aluminium major Hindalco tumbled 3.5 per cent. Drug producer Sun Pharma topped the buying list with 3.67 per cent gains while its rival Cipla rose 0.9 per cent. Cigarette major ITC was up 0.65 per cent.
In the second line shares, UB group stocks like United Spirits, Kingfisher Airlines and UB Holdings fell 6-8 per cent. The Directorate General of Civil Aviation has issued showcause notice to Kingfisher. Declining shares outnumbered advancing by a ratio of 830 to 627 on the National Stock Exchange.
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