The bears tightened their grip on the stock markets on the last day of this trading week and the penultimate session of January. Following on the heels of the 281-points fall on Thursday, the Sensex oscillated in a range of nearly 500 points through the day before ending lower by an identical 288 points or 1.5% at 18395 and the Nifty slid by 92 points at 5512. The broader markets had a rougher ride, with the midcap index ending at 6898, weaker by 2.6% and the smallcap index ending at 8546, down 3.5%. We are staring at a dismal monthly closing as the benchmark indices have lost almost 10% since the first day of the year.
The benchmark indices had closed below their 200-DMA (18730 on the Sensex and 5624 on the Nifty) in the previous session and hopes that a possibly false breakdown could trigger a reversal, especially with the derivatives expiry and RBI policy out of the way, have been comprehensively put to rest, atleast for now. If anything, the day's proceedings seem to have only confirmed the beginning of a long-term bearish trend. Monday's session is therefore crucial for the markets, as a closing below the 200-DMA for three consecutive days would be the proverbial nail in the coffin for the bulls for a while.
The extent of gloom to envelop the Street this month can be gleaned from the fact that around 35 out of the 50 Nifty shares slipped below their 200 DMA in the course of the day and one out of five actively traded stocks from the BSE-500 index touched one-year lows. Besides Reliance Industries, as many as 96 stocks featuring in BSE-500 index hit 52-week lows, including the likes of Reliance Capital, Reliance Industrial Infrastructure, JSW Steel, DLF, Steel Authority of India, HDIL, MTNL, Bharat Earth Movers and Financial Technologies.
On the global front, Asian stocks fell after Standard & Poor’s cut Japan's credit rating. The key benchmark indices in Hong Kong, Indonesia, Japan, Singapore and South Korea fell by 0.3%-1.4%. European equities dropped on Friday, pressured by mining shares, with investors staying cautious ahead of the release of US gross domestic product data that is expected to set near-term market direction. The key benchmark indices in France, Germany and UK fell upto 0.6%.
The rate-sensitive realty and auto stocks came under the hammer on renewed concerns that higher interest rates may dent the companies' net profit growth. The Reserve Bank of India (RBI) had hiked the key policy rates by 25 basis points on Tuesday. The BSE realty index was the largest loser among sectoral indices, plunging to 20-month lows of 2279, down 4.9% for the day. And the auto index cracked by 3.5% at 8841. DLF extended its previous day's losses of 5.4%, plunging another 7% at Rs 223 to top the list of losers on the BSE. HDIL was the top loser in the Group A category, weakening by 10% at Rs 139, IVRCL Infrastructure lost 8.7% at Rs 83 and Unitech lost 4.4% at Rs 51. And in the auto space, M&M lost 4.9% at Rs 696, Tata Motors slid by 4% at Rs 1145, Hero Honda lost 3.8% at Rs 1657 and Maruti lost 3% at Rs 1233. And index heavyweight RIL shaved off 3% at Rs 914.
On the other hand, ONGC strengthened by 1.8% at Rs 1135 ahead of its Q3 results scheduled later in the day and the news of having struck shale gas reserves in its maiden well at West Bengal. Reliance Infra gained 1.1% at Rs 724, Hindustan Unilever added 0.5% at Rs 272 and HDFC Bank edged higher by 0.3% at Rs 2058 on reporting a 33% rise in net profit on the back of a rise in loan demands and higher fee income.
More From This Section
In the midcap space, Blue Star weakened by 11.6% at Rs 349, Sterlite Technologies lost 10.3% at Rs 55 and Cholamandalam Investment lost 9.6% at Rs 165. And in the smallcap space, Autoline Global lost 12% at Rs 163, Suashish Diamong lost 11.8% at Rs 134 and Ess Dee Aluminium lost 11.5% at Rs 391.
The market breadth favoured the bears by a huge margin. Out of 3009 stocks traded on the BSE, there were a mere 506 advancing stocks as against 2386 declines.