The market succumbed to a wave of selling spooked by the Centre's decision to defer a hike in natural gas prices and expiry of monthly derivatives contracts as the benchmark CNX Nifty dropped sharply to end below the key 7,500 mark on the National Stock Exchange (NSE) today.
Energy stocks led a broad decline as investors turned highly cautious following the gas price hike deferment coupled with the security situation in oil-rich Iraq, which is witnessing a raging armed insurgency.
Financial, FMCG, metal, realty, infra and technology stocks, too, were impacted by heavy selling.
The 50-share Nifty plummeted by a whopping 76.05 points, or 1.00 per cent to finish at 7,493.20.
Late on Wednesday, Oil Minister Dharmendra Pradhan said the Cabinet Committee on Economic Affairs had deferred the revision of natural gas prices for public sector and private producers by three months pending a "comprehensive" review. He also said the Government was not considering a hike in LPG and kerosene prices.
Already grappling with uncertainty over monsoon and high inflation, this move by the Narendra Modi Government did not go down well with the market, traders said.
Squaring-off short positions by traders on account of expiry in the derivative segment further led to volatility.
State-run oil & gas major ONGC was the prominent index loser, slipping 5.84 per cent, while Gail fell 1.6 per cent. Oil marketing firms BPCL, HPCL and IOC dipped 2-4 per cent.
Other big laggards included Reliance, DLF, NTPC, United Spirits, Jindal Steel, Bank of Baroda, IndusInd Bank, Coal India and BPCL.
However, Wipro, Tech Mahindra, L&T, HCL-Tech, ITC, Dr Redddy's, Axis Bank, Lupin, Sun Pharma and Power Grid gained.
Turnover in the cash segment was substantially higher due to heavy transaction on the last date for settlement in F&O contracts, and shot-up to Rs 20,805.74 crore from Rs 15,805.74 crore yesterday. A total of 10,957.34 lakh shares changed hands in 75,11,756 trades, while the market capitalisation stood at Rs 86,81,588 crore.
