The benchmark indices plummeted on the back of relentless selling pressure in index heavyweights. The Sensex ended at 17,506, lower by 363 points or 2% and the Nifty shut shop at 5257, down 108 points. The broader markets were worse off; the midcap index ended at 6598, down 216 points or 3.1% and the smallcap index shut shop at 7907, down 266 points or 2.6%. All the sectoral indices on the BSE ended in the red, with realty, oil and IT witnessing the most selling pressure. Infact, the power, oil and metal indices touched 52-week lows during the day.
The modest gains on opening bell were a misnomer in retrospect. There was bloodbath on the Street midway through the morning session, with the Sensex tumbling as much as 600 points from the highs of the day at one point, on reports that tax treaty talks between India and Mauritius were likely to resume soon in an attempt to revise the existing double taxation avoidance agreement betwen the two countries. With India receiving nearly half of its foreign direct investment through companies and funds registered in Mauritius, there has been a clamour in the past to tax gains made such companies. A clarification by Finance ministry sources to the effect that timeline on the talks was yet to be decided led to a smart recovery from the day's lows, but was not enough to salvage the damage completely.
There was no solace on the global front either. The Asian markets had a mixed day, with the Hang Seng, Seoul and Taiwan shaving off around a percent each and the Nikkei and Straits Times edging higher. The European markets were also in the doldrums in mid-day trades, with the FTSE, DAX and CAC losing more than percent in continuation of their seven-week slide after the euro-zone finance ministers delayed a final decision on emergency loans to Greece. And the indications from Wall Street are also gloomy, with pre-market trading suggesting that the Dow could open lower by 70 points later in the day.
Investors lost Rs 1.43 lakh crore market capitalization (m-cap) in a single day after carnage on Dalal Street. The market capitalisation of actively traded stocks on the Bombay Stock Exchange (BSE) fell 2.2% or Rs 142,640 crore to Rs 64,16,314 crore.
Small-cap and mid-cap stocks were the biggest losers in percentage terms with their m-cap falling by more than 3% each. In absolute terms, the Sensex stocks were the largest losers, registering a loss of Rs 58,008 crore m-cap.
Reliance Industries was the biggest single-day loser, shedding Rs 11,064 crore in m-cap, followed by TCS (Rs 8,015 crore), ONGC (Rs 7,700 crore), ITC (Rs 4,101 crore) and NTPC (Rs 3,504 crore).
ADAG group stocks, Reliance Communication (weaker by 7.8% at Rs 87) and Reliance Infrastructure (down 6% at Rs 545) topped the losers list on the bourses after being excluded from the Sensex with effect from August 8. Coal India and Sun Pharma, which would be the replacements on the bellwether index, however ended on a flat note.
Index heavyweight Reliance Industries registered a fresh 52-week low of Rs 834, down 3.8%, to make it seven successive days of losses. The index heavyweight has been on a downhill ever since the Comptroller and Auditor General of India (CAG) questioned the decision of the oil ministry and its technical arm, the Director General of Hydrocarbons (DGH) to allow the company to raise the development cost of the KG-D6 field.
The BSE IT index also ended lower for the fourth straight day and the lowest in nine months on fears that Greece's debt crisis and a slowing global economy would affect the revenue growth of the sector. TCS weakened by 3.6% at Rs 1069, Infosys Technologies lost 2% at Rs 2708 and wipro shed 1.6% at Rs 402. Infact, Infosys, ONGC, Reliance Industries, BEML and Aban Offshore were among the frontline stocks that hit 52-week lows on the BSE during the day.
Only three BSE stocks bucked the trend; Bharti Airtel rebounded by 2.3% at Rs 389 post its May subscriber numbers, Hindustan Unilever gained 0.3% at Rs 322 and Hero Honda added 0.1% at Rs 1733.
The overall breadth was extremely negative; Out of 2920 stocks traded on the BSE, 2279 stocks declined, while merely 556 advanced.
