Sensex falls 324 points; capital goods stocks decline

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SME Times News Bureau | 16 Sep, 2014
A benchmark index of Indian equities markets closed Tuesday's trade around 324 points down, as capital goods, banks and automobile stocks plunged.

This is the second consecutive sell-out in the market triggered by weak industrial data and anxiety over the US Fed stimulus cut.

The market fell by more than 250 points Monday. Investor sentiment has turned bearish after days of rally in the market.

Analysts point out that the sour sentiment is a reaction to slow industrial growth data coupled with anxiety regarding global cues such as the two-day US Fed meet.

"The market has lost almost over 100 points on Nifty and over 300 points on Sensex. The fall was mainly due to weak global cues, especially due to weak Asian markets," said Shrikant Chouhan, head- technical research, Kotak Securities.

"The domestic data like CPI and IIP was also not up to expectations or consensus that has also triggered weakness in the market."

The industrial activity data, measured in terms of the Index of Industrial Production (IIP) has been below expectations. It only grew 0.5 percent in the month of July over the same month of the previous year.

India's retail inflation too slowed down marginally at 7.8 percent in August from 7.96 percent in the previous month.

However, India's annual rate of inflation, based on official wholesale price index, gave some relief to the market as it fell to a near-five-year low of 3.74 percent for August.

The 30-scrip Sensitive Index (Sensex) of the S&P Bombay Stock Exchange (BSE), which opened at 26,854.90 points, closed trade at 26,492.51 points, down 324.05 points or 1.21 percent from the previous day's close at 26,816.56 points.

The Sensex touched a high of 26,861.29 points and a low of 26,464.03 points in the intra-day trade.

The wider 50-scrip Nifty of the National Stock Exchange (NSE) fell below the 8,000-mark. It closed the day's trade down 109.10 points or 1.36 percent at 7,932.90 points.

All sectoral indices at the BSE closed the day's trade in red.

Capital goods, banks, automobile, oil and gas, consumer durables and healthcare stocks sustained heavy selling pressure.

The S&P BSE capital goods index was down 411.61 points, bank index slipped by 369.47 points, automobile index plunged 310.11 points, oil and gas index was lower by 300.50 points, consumer durables index declined by 246.74 points and healthcare index lost 187.33 points.

The major Sensex losers were: Tata Power, down 5.85 percent at Rs.83.70; Tata Steel, down 3.45 percent at Rs.490.05; Axis Bank, down 3.14 percent at Rs.398.85; ONGC, down 2.98 points at Rs.408.75; and Larsen and Toubro, down 2.79 percent at Rs.1,516.90.

The major Sensex gainers were: Dr Reddy's Lab, up 1.15 percent at Rs.3,010.80; Hindustan Unilever, up 0.47 percent at Rs.758.35; ITC, up 0.38 percent at Rs.353; Infosys, up 0.37 percent at Rs.3,656.55; and Sun Pharma, up 0.31 percent at Rs.797.90.

In Asian markets, Nikkei closed 0.23 percent down and China's Shanghai Composite index lost 1.82 percent while Hong Kong's Hang Seng closed 0.91 percent lower.

In Europe, London's FTSE 100 lost 0.45 percent, Germany's DAX Index declined by 0.40 percent, and France's CAC 40 was down by 0.54 percent.