Bears outsmarted the bulls on Thursday as every attempt at a pullback was met with an intense sell-off after a sharp rally in the previous session. The market ended in the red for the first time since March 30. Realty, metals and capital goods faced intense selling pressure while FMCG stocks bucked the trend.
Indices had opened firm and crossed psychological resistance levels for a brief period but the gains were trimmed as long investors cashed in.
“There was renewed interest from local traders, which is evident from the fact that turnover was highest since January ’08 while open interest in derivatives crossed 85,000 crore, highest since September 2008 (Nifty was at 4000 in September). In addition, an outstanding of 123.5 crore shares in single stock futures indicated build-up of euphoria,” said Deepak Sawhney, head of research, Networth Stock Broking.
Bombay Stock Exchange’s Sensex ended at 10,947.40 down 337.33 points or 2.99 per cent. The index touched an intra-day low of 10900.47 and high of 11367.23. The National Stock Exchange’s Nifty closed at 3358.50, down 125.65 points. The broader index hit a low of 3354.20 and high of 3511.25 during the day.
BSE Midcap Index was down 4.53 per cent and BSE Smallcap Index fell 4.72 per cent. Suzlon (-18.68%), Tata Motors (-14.23%), Unitech (-10%), Cairn (-9.38%), Reliance Infrastructure (-9.2%) were the biggest Nifty losers. BPCL (4.21%), ITC (3.54%), Wipro (3.22%), Sun Pharma (1.64%) and Hindustan Unilever (1.57%) were amongst the gainers.
Amongst the sectoral indices, BSE Realty Index tumbled nearly 10 per cent, BSE Metal Index fell 6.97 per cent and BSE Capital Goods Index was down 4.95 per cent.
Market breadth was extremely negative with 1,742 declines against 851 advances on the BSE.
“For the time being market will consolidate between the range of 3150-3550 and take cues from earnings and global cues,” Sawhney said.
In stock specific action, Gitanjali Gems soared over 31 per cent intra-day after the jewellery manufacturer announced Rs 144-crore buyback. The firm intends to buy back up to 1.2 crore shares at a price of up to Rs 120 each. However, the stock gave up most of its gains and ended 15.83 per cent higher at Rs 84.50.
Suzlon Energy took a beating amid media reports that the wind turbine maker is negotiating with a Malaysia-based investor to raise nearly Rs 400 crore to increase its stake in Germany's REpower. According to reports, Suzlon may pledge some of its holding in its overseas engineering subsidiary, Holco, to C. Sivasankaran to raise the cash. The company’s shares slumped nearly 19 per cent to Rs 55.95 on the BSE.
Investors dumped Ranbaxy Laboratories amid media reports that the company may be sitting on mark-to-market losses of over Rs 2,500 crore on foreign currency derivatives transactions. The pharma company’s shares closed at Rs 187.45, down 6.37 per cent.
Arvind Mills surged 16.76 per cent to Rs 20.20 on NSE as it rescheduled Rs 904 crore of long term debt, as a result of which average maturity of the debt has increased by about 2 years. The company's board approved issue of 332 lakh warrants, each convertible in one equity share at Rs 15 per share, amounting to around Rs 51 crore.
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