After worries over Greece’s debt problems, falling metal demand in China proved to be a drag on India’s equity markets today. The country’s main stock index, Sensex, was the second-biggest loser globally after Singapore’s markets. The mood on the Street has turned cautious, say market players. Domestic institutional investors (DIIs) were major sellers today.
A drop in European stocks on concerns over Greece's bailout added to the shaky sentiment, after the market rebounded from a lower start in the morning.
Base metal prices tumbled in London with copper hitting seven-week lows on worries China might tighten monetary policy further and cause demand to thin from the world's top consumer of many base metals.
| HIT HARD | |
| TOP SENSEX LOSERS | |
| Stocks | Fall (in %) |
| Hindalco Ind | 5.8 |
| Tata Steel | 4.9 |
| Sterlite Industries | 4.15 |
| TOP SECTORAL LOSERS | |
| BSE Index | Fall (in %) |
| Metal | 3.9 |
| Realty | 2.8 |
| Consumer | 1.7 |
A sharp fall in key metal stocks Tata Steel, Hindalco Industries and Sterlite Industries saw the Bombay Stock Exchange (BSE) Sensex fall 248 points, or 1.43 per cent, to 17,137. It has slipped 421 points in the last two trading sessions.
The broader index, S&P CNX Nifty of the National Stock Exchange (NSE), fell over 76 points, or 1.42 per cent, to 5,148.
Provisional figures showed DIIs sold stocks worth Rs 438 crore while foreign players were net sellers to the tune of Rs 29 crore in the cash segment.
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China’s benchmark equity index, Shanghai Composite, was down 1.23 per cent. A survey showed Chinese manufacturing slipped to a six-month low in April, just two days after policy makers reined in lending. Other indices in Taiwan, Indonesia, Hong Kong and South Korea were down between 0.06 and 1.46 per cent. The markets in Japan were closed for a public holiday.
“The mood among investors is cautious now. While the markets fell as a knee-jerk reaction to China, investors are hoping that the European debt crises does not spread beyond PIGS (Portugal, Italy, Greece and Spain) countries,” said Ambreesh Baliga, vice-president of equities at Karvy Stock Broking.
Baliga said the Nifty would be fairly valued at 4,700-4,800 in case the crisis deepens.
Key equity indices in France, Germany and the UK were down between 0.7 and 1.5 per cent.
However, Kirti Doshi, director at Mumbai-based Antique Stock Broking, said, “The downside could not be more than 3-5 per cent in the near term. The markets will again start moving as monsoon will be better this time and there is a possibility that the government may de-regulate fuel prices, giving a boost to oil marketing companies.” Doshi sees Nifty above 5,500 in the next couple of months.
The much-awaited Supreme Court judgment on the gas tussle between the Ambani brothers could be a short-term trigger for the markets. The judgment would affect share prices of Reliance Industries and Reliance Natural Resources.
Small and mid-cap indices on BSE were down 1.75 per cent today. The market breadth was extremely weak as 70.6 per cent stocks fell and just 26.2 per cent, or 776 scrips, rose.