Mumbai: The BSE Sensex lost as much as 190 points intraday on Wednesday as heavy fall in major blue chips indicated that the foreign institutional investors may have offloaded some exposure. The Indian rupee too depreciated by 23 paise to 55.88 against the US dollar. But the defensives like HDFC, ITC, HUL and TCS managed to limit the downside.
Another reason could be that investors may have lost patience to hold on stocks on hopes of new reforms, new strategy to limit the rising fiscal deficit and diesel price cut by the government. Both houses of parliament were adjourned for the 11th day of monsoon session as the Bharatiya Janata Party stuck to its protest over coal allocation scam.
The BSE benchmark fell 127.53 points to close at 17,313.34 after hitting an intraday low of 17,250.80. Meanwhile, the NSE benchmark declined 48.30 points to 5,225.70.
But the broader markets slightly outperformed benchmarks as the BSE Midcap and Smallcap indices were down 0.3-0.5 per cent as compared to 0.7 per cent fall in benchmarks.
European markets were volatile as investors looked bit edgy ahead of a meeting of European Central Bank tomorrow. Experts don’t expect too much announcements from the ECB. Bhanu Baweja, head of research and EM strategy of UBS says he doesn't think the ECB is going to give huge amount of detail tomorrow.
"We first have to wait for the German Constitutional Court to ratify the ESM. They are likely to do that somewhere close to the middle of this month. Once they do that, that’s when the ECB will go forward with giving you more details on its bond purchases," he adds.
Back home, country’s largest private sector lender ICICI Bank plunged 3.56 per cent while its rival State Bank of India was down over 2 per cent.
Private sector lender Axis Bank went down 5 per cent after the research firm Morgan Stanley downgraded the stock to underweight from equal weight and cut its target price to Rs 800 from Rs 900.
Index heavyweight Reliance Industries and software services exporter Infosys declined 1 per cent each.
The BSE Capital Goods Index tanked 2.5 per cent as engineering and construction major Larsen & Toubro tumbled nearly 3 per cent. State-run power equipment manufacturer BHEL topped the selling list with a loss of 5 per cent.
Metals stocks hit quite badly as the BSE Metal Index was down 2.6 per cent. Jindal Steel plummeted nearly 5 per cent. Hindalco Industries, Sterlite Industries and Tata Steel were down 2.6 per cent-3.4 per cent.
Commercial vehicle major Tata Motors lost 2.6 per cent. Country’s largest IT services exporter TCS gained 1.4 per cent.
Telecom operator Bharti Airtel topped the buying list with 3.3 per cent gains. FMCG majors ITC and HUL were up 0.66 per cent and 1.84 per cent, respectively.
Housing finance company HDFC and private sector lender HDFC Bank rose 0.3 per cent each.
Declining shares outnumbered advancing by 856 to 570 on the National Stock Exchange.
In the second line shares, Jain Irrigation lost 3.66 per cent on concerns over equity dilution. S Kumars Nationwide was down another 3 per cent after losing 5 per cent on Tuesday.
Indiabulls Real, Sintex, Yes Bank and Ashok Leyland were down 1.6-3 per cent. PFC and REC fell 3-5 per cent.
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