 "Profit booking hits Indian shares for the second consecutive day")
Profit booking for the second day in a row took toll on Indian shares on Wednesday as Sensex and Nifty witnessed an erosion of over 1% in their values. Today's fall was the biggest fall in benchmark key indices in last six weeks with a dip of 310 points in Sensex to levels of 27,774 while Nifty lost nearly 103 points to settle at 8,575.30.
Despite a 10% rally thus far this financial year, Indian markets are now facing stiff resistance. Levels of 28,000 and on Sensex and 8,600 on Nifty appear to becoming points of profit booking.
According to market participants, these corrections are healthy ones and going forward there will be further such declines which should be used for buying. They add that markets have seen a steep rally in short span of period and the trend is likely to be arrested with corrections amid consolidation around 8,200, 8,300 levels on Nifty.
Deven Choksey, managing director of KRChoksey Shares and Securities, says, "Today's correction is nothing but a running correction in stocks. There will be more such corrections going forward. Investors need to stay away from euphoria and buy quality stocks when they crack. The world market including ours had moved up due to gush of liquidity and some corrections are underway."
Among the sectoral indices, pharmaceuticals and automobile bore the most brunt today as they fell 2.01% and 1.93%, respectively. Shares of Aurobindo Pharma, Glenmark and Lupin were the most hit as their counters lost between 2.4% and 4% in today's trade.
In the automobile sector, stocks of companies like Tata Motors, Maruti Suzuki, Eicher Motors, Motherson Sumi, Hero MotoCorp, Mahindra & Mahindra, Apollo Tyres were down about 2-6%.
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Ambareesh Baliga, an independent market expert, says, "It's time to book partial profit as there could be corrections to level of 8,200 on Nifty going ahead. This will be healthy correction and should be used to buy. Markets had a steep rally and correction is on the horizon.
Of the 50 stocks in Nifty, 42 ended in the red; while 7 gained and one remained unchanged. Shares of companies like Ambuja Cements, Idea Cellular, Grasim Industries and ACC were the top losers with a decline of 4 to 7.3%. On the other hand, Adani Ports, Bank of Boroda and TCS were the top gainers in today's trade session.
Meanwhile, global oil prices extended losses after industry data showed a rise in US crude stockpiles. The oversupply concerns also added negative sentiments to stocks.