After closing below the 18,000-mark on Tuesday, the BSE Sensex failed to recover lost ground today as well. Nervousness gripped the markets, as the bourses have registered a fall of over 15% since the beginning of the year owing to high inflation and rate hike concerns. Markets were also anxious ahead of December’s IIP numbers which will be announcement on February 11, the November IIP was weak at 2.7%. The bear hammering at the ADAG counters was the highlight of the day. The Sensex wrote-off 183 points at 17,593, while the Nifty fell 59 points at 5,254.
A fair recovery marked morning trades, when the Sensex rebounded from a low of 17,593 and gained 33 points at 17,864 around 1030 hours after a negative market opening following weak Asian cues. The late selling saw the BSE’s benchmark index slump to a low of 17,508.
Gainers on the Sensex were Mahindra & Mahindra at Rs 654 up 4% following a 78% jump in quarterly profits at Rs 735 crore (y-o-y), while HDFC at Rs 610 gained 3% and DLF at Rs 242 closed up 1%.
Alternatively, ADAG stocks Reliance Infra at Rs 535 and Reliance Communications at Rs 95 were down 19% and 14% respectively, on the Sensex. Reliance Infra tumbled to Rs 493, its intra-day low, and also its 22-month low. Reliance Communications took a severe beating to end at its all-time low of Rs 95 after market regulator, the Sebi, barred Reliance Infra and Reliance Natural Resources, now merged into Reliance Power, from investing in publicly-listed securities till the end of calendar year 2011. The Sebi found these companies guilty of mobilizing funds raised through overseas borrowing and foreign bonds to transact in the markets.
The partial recovery in ADAG stocks came after the CBI said it had no plans to summon RCom officials to question them in relation to the ongoing 2G scam, according to television reports.
Among the other major losers, JP Associates fell 11% at Rs 72, while Hindalco Industries at Rs 220 shed 6%, and BHEL at Rs 2,095 closed down 4.3%.
In the east, Asian markets clocked negative returns on the back of rate hikes at China, for the second time in the past 6 weeks. Japan’s Nikkei closed flat at 10,618, while the Straits Times slipped 1% at 3,151. The Seoul Composite and Taiwan Weighted fell 1.2% each at 2,046 and 9,007 respectively. The Hang Seng lodged losses of 1.4% to close at 23,164, and the Shanghai Composite shut shop at 2,773 down a little under 1%.
Major European indices also saw weak trades, with the FTSE 100 down 0.3% at 6,071, while Germany’s DAX at 7,321 and France’s CAC 40 at 4,100 were trading flat.
Sectoral indices witnessed a negative close today, with power stocks experiencing the maximum impact of selling pressure. The index shed 4% to close at 2,506. Metal stocks lost heavily, with the index losing nearly 4% at 15,264. Realty, one of the worst-performers today, also fell a little under 4% at 2,085.
Power companies that saw aggressive selling were ADAG stock Reliance Infra, which saw a free-fall of 19% at Rs 535, Lanco Infratech down 14% at Rs 33, on talks of the company's promoters contemplating a stake diluiton, and GMR Infra at Rs 32 down 12%, on expectations the company may post a loss in Q3FY11 earnings.
In the broader market space, the BSE Mid-cap and Small-cap underperformed the benchmark; the indices were down 4% each at 6,299 and 7,652 respectively.
