Markets dip ahead of Aug F&O expiry

Markets continued their losing streak for the fourth straight session on Wednesday, ahead of the expiry of August derivative contracts and first quarter GDP numbers due on Friday, with index heavyweights leading the fall.

The 30-share Sensex ended at 17,491 down 141 points or 0.80% and the 50-share Nifty ended at 5,288 down 47 points or 0.88%. The Sensex and the Nifty reached an intra-day low of 17,471 levels and 5,283 mark, respectively

On the global front, Japanese shares edged higher on Wednesday, with Renesas Electronics Corp surging 35 percent after sources said U.S. private equity fund KKR & Co plans to invest around $1.3 billion in the struggling chipmaker.

Overall trading remained subdued, however, with volume on the Topix at just 85.9 percent of its 90-day average, as investors were unwilling to build positions ahead of a speech by U.S. Federal Reserve Ben Bernanke on Friday, in which he is expected to give clues on the possibility of further stimulus measures.

Shares and the euro traded in tight ranges on Wednesday with investors reluctant to take positions ahead of a speech by the U.S. Federal Reserve chairman and before seeing the European Central Bank's plan to tackle the region's debt crisis.

However, oil prices eased after Hurricane Isaac hit land in the U.S. Gulf state of Louisiana overnight and looked set to spare local production facilities from significant damage.

Back home, on the sectoral front, BSE Realty index tumbled over 3% followed by counters like Auto, Metal, Oil & Gas, Capital Goods, Power, PSU and IT, all declining between 1-2%. However, BSE FMCG index gained by nearly 1%.

From the Metal space, Sterlite Industries, Sesa Goa and Steel Authority of India declined around 5% each. Hindalco Industries was down 2.67%, its lowest level since September 2009. JSW Steel and Tata Steel were too down 1-2% on the BSE.

On Tuesday, copper & other metals declined on concerns about the global economy and mixed US economic data's released that did not convince investors the Federal Reserve will unleash a new round of stimulus later this week.

Also, big metal consumer China's industrial sector posted a sharp profit drop in July, showing that slackening domestic and external demand has weighed on corporate earnings, the Reuters report suggests.

From the Auto space, Bajaj Auto, Tata Motors, Hero Moto and M&M slipped between 1-4%. Auto shares declined on concerns that sales growth in August would remain subdued on account of high interest on auto loans and rising fuel prices.

Technology major like Infosys and TCS slumped by nearly 0.5-2%. Software exporters continued to witness profit taking at higher levels after gains last week and ahead of key US economic data due for release this week. Infosys, Wipro and TCS earn most of their revenues from exports to the US.

Oil and Natural Gas Corporation (ONGC) ended over 2% lower extending its previous day’s 2% fall after the Comptroller and Auditor General (CAG) damned the state-owned oil exploration firm for lack of focus on exploration, inefficient operations and tardy pace of developing new oil and gas finds.

Capital Goods majors like BHEL and L&T declined between 1-3%. Index heavyweight RIL declined by nearly 1%.

Other notable losers included Bharti Airtel, HDFC, GAIL India, ICICI Bank, SBI and Sun Pharma.

On the gaining side, Tata Power was the top Sensex gainer, up almost 2% in otherwise subdued market after the Maharashtra Electricity Regulatory Commission increased fuel adjustment cost ceiling to 20% from 10%.

The broader indices ended on a lower note – BSE Midcap and Smallcap indices ended down between 0.5-1%.

The market breadth remained dismal with 1,718 declining and 1,062 shares advancing.

Smart Movers

Mastek dipped 10%, extending its previous day’s fall, after the Bombay Stock Exchange (BSE), on Monday, moved the stock to the T group segment as a surveillance measure.

Jaiprakash Associates tanked 9% after the infrastructure company said that it has launched foreign currency convertible bond (FCCB) issue of $150 million for repayment of the exiting FCCBs.

Pantaloon Retail (India) ended 4% lower on reports that Aditya Birla Nuvo is set to rework its deal for a controlling stake in the company due to valuation concerns.

Reliance Communication (Rcom) slipped over 5% on back of heavy volumes on the counter.