Sensex dips 162 points

The softening of crude oil prices and the rising Dow Jones Index failed to enthuse the markets on Wednesday, with across-the-board selling triggered by concerns over stretched valuations pulling down the Sensex by 162.38 points. The broad-based CNX S&P Nifty, too, lost 54.25 points.

Market speculation that the troubled Spanish hedge fund, Vega Asset Management, and another Japanese fund were liquidating holdings in emerging markets, including India, to offset losses in US bonds also added to the valuation worry.

"The market will get direction only after a clear picture emerges on the second-quarter earnings of corporate India. For the time being, sentiment has turned cautious, if not mildly bearish," said a fund manger.

Across-the-board selling pulled the Sensex below the 12,200 mark to 12,178.73 from an intra-day high of 12,419.65 in a volatile day.

For the benchmark index, Wednesday's drop was the biggest single-day fall in more than two weeks. In the last two trading days, the Sensex shed over 250 points.

Dealers said the Sensex, which was inching towards its lifetime high of 12,612, reached this May, was also showing signs of weakness mainly on account of the muted outlook for second-quarter earnings from corporates.

Only two stocks in the Sensex ended higher from yesterday's level "" Bajaj Auto (up 1.85 per cent to Rs 3,087.25) and Tata Motors (up 1.22 per cent to Rs 880.25). HDFC Bank was the biggest loser in the Sensex, ending at Rs 892.45 (down 3.08 per cent), followed by BHEL (down 2.96 per cent to Rs 2,301.60), Hero Honda (down 2.66 per cent to Rs 751.20), TCS Ltd (2.60 per cent to Rs 988.10) and HDFC (2.48 per cent to Rs 1,440.70).

Consumer durables stocks lost the most after stealing the show yesterday. Titan lost 2.5 per cent to Rs 782 and Videocon slipped 1.3 per cent to Rs 413. Metal stocks, too, were down, with Sterlite Industries losing 1.7 per cent to Rs 438 and Hindalco slipping by 0.3 per cent to Rs 171.

Only sugar stocks witnessed fresh buying. Dhampur Sugar rallied 3 per cent to Rs 119, Sakhti Sugar gained 0.5 per cent to Rs 133 and Balrampur Chini edged 0.3 per cent higher.

Dealers said foreign funds, which had pumped in $5 billion into Indian equities this year, had turned net sellers in the last two days. According to NSE data, foreign institutional investors were net sellers to the tune of Rs 276 crore yesterday.

Most Asian indices were down on Wednesday. Japan's Nikkei was down 0.98 per cent, Taiwan was down 1.18 per cent and South Korea's Kospi ended lower by 1.62 per cent.