The markets closed for the day in the red. The BSE benchmark index, Sensex lost 228 points at 19,158 and the Nifty shed 75 points at 5,749.
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(Updated at 1450 hrs)
The Sensex continues to trade in the negative with the index down 228 points at 19,158 and the Nifty losing 75 points at 5,749. The broader markets too are trading in the red with the smallcap index down 0.3% and the midcap index down 0.8%. IT and Realty indices down 2% each are the major draggers.
Earlier in the day, after opening on a flat note, the markets made a sharp recovery led by gains in frontline shares such Reliance Industries and Larsen & Tourbo where the Sensex touched a high of 19,649. However, in the late morning session a sudden bout of selling saw the Sensex tumble over 400 points which continued into the last hour of trading. The uncertainty of the result season coupled with the high inflation numbers seems to keep the investors edgy leading to a sudden fall.
On the last trading session of the previous week, Infosys kick started the earnings season on a negative note as results were below analysts’ expectations. Brokerages expect a bumpy ride in the markets going forward if more front line companies undershoot estimates. Volatility is expected to remain high during the earnings season. The India VIX (Volatility Index) was up 5% at 23.
Hormoz Maloo, Technical analyst, Geojit BNP Paribas said, “The rise in the morning was quite unwarranted. We are within the result season, and as good and bad results are expected or announced the market would be quite volatile. In earlier quarters, the market has shown a good correction in the result season. I expect the same to occur this time also."
Elsewhere, the Asian markets too closed mostly in the red. Shanghai Composite and KLSE Composite were the only aberration which closed up 0.2% and 0.4% respectively. Among the major losers were Hang Seng down 0.7% followed by Nikkei and Straits Times declined 0.3% each.
