Jaiprakash, DLF, Tata Steel fall over 10 per cent.
Heavy profit-booking by domestic institutional investors (DIIs) led to a sharp fall in the Bombay Stock Exchange’s (BSE’s) Sensitive Index, or Sensex, On Monday.
According to the provisional figures of the BSE, net sales by the DIIs were to the tune of Rs 872.92 crore in the cash market. Foreign institutional investors’ net purchases were a mere Rs 14 crore.
The Sensex fell 437.63 points, or 2.9 per cent, to 14,665.92. The S&P CNX Nifty lost 3.4 per cent to close at 4,429.90. This is the biggest drop since March 30. The small and mid-cap stocks fell even more. The BSE small- and mid-cap indices fell 5.80 per cent and 5.45 per cent, respectively. Till last weekend, the Sensex had risen 88 per cent over 13 weeks, its highest rise in four years.
“A correction was due after such a phenomenal rise,” said Anita Gandhi, head of institutional equity at Arihant Capital Markets.
The advance to decline ratio showed poor market breadth. A total of 2,246 stocks, or 78.48 per cent, on the BSE declined, while 582 stocks, or 20.34 per cent, advanced.
Realty, metal and banking stocks led the fall On Monday. Stock prices of Anil Ambani-led Reliance group companies, which had moved over 100 per cent in the last two months, fell sharply.
Among Asian markets, the Shanghai Composite and Nikkei were up 0.52 per cent and 1 per cent, respectively. The Taiwan Weighted fell 3.34 per cent, the Strait Times was down 2.61 per cent and the Hang Seng slipped 2.28 per cent.
On Friday, all three benchmark indices closed flat. The Dow Jones Industrial Average was up 0.15 per cent, the Nasdaq was down 0.03 per cent and the S&P 500 was down 0.25 per cent.
Except the IT index, which was up 1.57 per cent, all other sectoral indices closed in the red. The realty index led the fall with 10.54 per cent drop, followed by metals (-6.51 per cent) and bankex (-4.42 per cent).
Among Sensex stocks, Jaiprakash Associates, DLF and Tata Steel lost over 10 per cent. Jaiprakash Associates fell 10.40 per cent, DLF 10.34 per cent and Tata Steel 10.21 per cent. Reliance Communication was down 8.68 per cent while Reliance Infrastructure fell 8.55 percent.
Market experts believe that market conditions could continue to be volatile and range-bound in the run-up to the Budget. “For the short term, the downside could be more than the upside. The Sensex could witness a correction of 10-15 per cent, but the ultimate market direction will be set after the Budget,” said Manish Sonthalia, equity fund manager, Motilal Oswal.
