The benchmark stock indices witnessed a heightened bout of selling pressure especially during the last hour of the trading session on Wednesday that saw the 30-share Sensex falling below the 16,000-mark. Today’s fall also snapped a three-day winning streak of the benchmark indices. The fall in the stock price in the last hour of trade was due to concern over the possible increase in fuel prices.
Among other market heavyweights, NTPC shares lost further ground thereby falling below the follow-on price of Rs 201. The shares closed at Rs 200.45 on BSE. On December 31, 2009, NTPC had touched a new 52-week high of Rs 241.70. Other Sensex constituents that ended the day in the red included Tata Steel, BHEL, DLF, HUL, L&T, Reliance Industries and Mahindra & Mahindra.
Sectors such as auto, power, banking, apart from the public sector entities, lost maximum ground even as the mid- and small-cap arena did produce some winners. The market breadth, notably, was almost equally divided signifying a large number of gainers too. However real estate companies such as Unitech, Indiabulls Real Estate and HDIL rose.
The benchmark Sensex experienced volatility throughout the trading session while moving in a range of 250 points. The index remained in the red for most part of the day, before closing at 15,922, down 120 points or 0.75 per cent. The broader S&P CNX Nifty ended the day at 4,757, down 35 points. Interestingly, the Indian indices lost ground on Wednesday even as most Asian indices registered marginal gains. Hang Seng, Shanghai Composite and Nikkei all moved further northwards. Most of the European indices also registered modest gains on reports that the European Union (EU) would bailout troubled economies including Greece.
DD Sharma, vice-president (research), Anand Rathi Financial Services attributes Wednesday’s falls to lack of positive newsflow and the weak investor sentiment. “For the past few days, every rise is being met with selling pressure and that was the case on Wednesday also. While global newsflow is not encouraging, the dismal performance of NTPC has led to fears that the fiscal stimulus might be partially rolled back to rein in the fiscal deficit,” said Sharma. Earlier this week, commerce and industry minister Anand Sharma had hinted at a partial withdrawal of stimulus packages.
Banking shares experienced weakness after reports that the Reserve Bank of India (RBI) pulled up most of the banks for not reducing home loan rates for existing customers. Reports further suggest that the central bank has written to the Indian Banking Association (IBA). The BSE Bankex lost nearly 1 per cent with sector heavyweights such as ICICI Bank, SBI, PNB and Axis Bank all losing ground. The combined turnover on the bourses was pegged at around Rs 99,881 crore. According to provisional figures, foreign institutional investors continued their selling spree, offloading equities worth Rs 208.6 on Wednesday, according to provisional data on NSE.
FIIs have net sold shares worth over Rs 4,000 crore in the current month. Domestic insitutions continued to remain net buyers of Rs 459.1 crore in today’s trading.
