Markets slump after sell off in Japan, Nikkei down 5%

Markets were trading near their day lows in late morning deals, amid weak Asian cues, with capital goods and rate senstive shares among the top losers.  

By 11:40, the 30-share Sensex was down 307 points at 19,755 after hitting a low of 19,702 and the 50-share Nifty was down 104 points at 5,990.

On the global front, Japanese government bonds plunged on Thursday, taking yields to their highest in a year and leading a selloff in bonds globally after Federal Reserve Chairman Ben Bernanke's remarks sparked worries of a reduction in U.S. monetary stimulus.

Japan's Nikkei slumped over 5% while Hang Seng dropped over 2%. Shanghai Composite was down 0.1% while Straits Times was down 0.8%.

The BSE Realty Index was the top loser among sectoral indices on the BSE down over 5% followed by Power, Capital Goods, Consumer Durables, Auto and Bankex among others.

In the realty pack, DLF and Anant Raj was down 7%, HDIL and Unitech slumped 9% each.

Auto shares also witnessed profit taking after recent gains. In the Sensex pack, Tata Motors, Maruti Suzuki, M&M, Bajaj Auto and Hero MotoCorp were down 1.3-4.4% each.

Index heavyweights Reliance Industries was down nearly 2% while ITC slipped 1%.

Larsen & Toubro extended losses today and was down over 3% after the engineering conglomerate on Wednesday reported worse-than-expected 6.9% year-on-year decline in net profit at Rs 1,788 crore for the quarter ended March 31, 2013 (Q4) due to higher interest costs. India's biggest engineering and construction firm had profit of Rs 1,920 crore in a year ago quarter.

Bharat Heavy Electricals Limited (BHEL) is trading nearly 4% down at Rs 195 ahead of its Q4 (January-March) results today.

In the banking pack, ICICI Bank was down 3.3% and SBI was down 2.7%.

Ranbaxy Laboratories has tanked 7% to Rs 392 on reports that Drug Controller General of India (DCGI) had been ordered to examine all the dossiers and drug applications on the basis of which approvals had been granted to Ranbaxy in the past.

Among other shares, Fairfield Atlas is trading higher by 3% at Rs 217 extending its three-month long rally on the Bombay Stock Exchange (BSE) on delisting plans. TH Licensing Inc, the promoter of the company is proposing to make a voluntary delisting offer to the public shareholders from the BSE to meet the market regulator mandate that all listed companies have to increase public shareholding to a minimum 25% by June 3.

Among broader markets, BSE Midcap and Smallcap indices extended losses and were down over 2% each.

The market breadth in BSE remains weak with 1,527 shares declining and 383 shares advancing.