Nifty ends below 5,300 ahead of Aug expiry
Markets continued their losing streak on Wednesday, amid weak European cues, with index heavyweights leading the fall.
The 30-share Sensex provisionally ended down 140 points at 17,492 and the 50-share Nifty ended down 49 points at 5,286.
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(Updated at 14:09 hrs)
Markets have extended the losses and have reached near day low weighed down by weakness among Auto, Metal and Capital Goods shares. Weak opening of the European markets has further dampened the sentiments.
By 1410, the Sensex was down 109 points at 17,523 and the 50-share Nifty was down 35 points at 5,299. The Sensex and the Nifty touched an intra-day low of 17,490 mark and 5,290 levels, respectively so far.
On the global front, shares and the euro were stuck in tight ranges on Wednesday with investors reluctant to make any moves ahead of a key speech by the U.S. Federal Reserve chairman on Friday and details of the European Central Bank's response to the region's debt crisis.
However, oil prices slid after Hurricane Isaac, which hit land in the U.S. Gulf state of Louisiana overnight, spared oil production facilities from any significant damage.
The European single currency was near a seven-week high against the dollar at $1.2555, supported by a view the Fed may soon ease monetary policy further and optimism the ECB will shortly detail an effective plan to tackle the high borrowing costs facing struggling euro zone nations like Spain.
Back home, on the sectoral front, BSE Realty index has tumbled by almost 2% followed by counters like Auto, Metal, Oil & Gas, Capital Goods, PSU and IT, all declining by 1% each. However, BSE Healthcare index has gained by nearly 0.5%.
Shares of metal companies are under pressure second day in a row falling up to 5% in noon trades on the Bombay Stock Exchange (BSE).
Sterlite Industries, Sesa Goa and Steel Authority of India have declined around 5% each. Hindalco Industries is down 2.5% at Rs 104, its lowest level since September 2009. JSW Steel and Tata Steel are too down 1-2% on the BSE.
On Tuesday, copper & other metals declined on concerns about the global economy and mixed US economic data's released that did not convince investors the Federal Reserve will unleash a new round of stimulus later this week.
Also, big metal consumer China's industrial sector posted a sharp profit drop in July, showing that slackening domestic and external demand has weighed on corporate earnings, the Reuters report suggests.
From the Auto space, Bajaj Auto, Tata Motors, Hero Moto and M&M have slipped between 1-4%. Auto shares declined on concerns that sales growth in August would remain subdued on account of high interest on auto loans and rising fuel prices.
Technology major like Infosys has slumped by nearly 2%. Software exporters continued to witness profit taking at higher levels after gains last week and ahead of key US economic data due for release this week. Infosys, Wipro and TCS earn most of their revenues from exports to the US.
Oil and Natural Gas Corporation (ONGC) is trading lower by 2% at Rs 277, extending its previous day’s 2% fall after the Comptroller and Auditor General (CAG) damned the state-owned oil exploration firm for lack of focus on exploration, inefficient operations and tardy pace of developing new oil and gas finds.
Capital Goods majors like BHEL and L&T have declined between 0.3-3%.
Other notable losers include Bharti Airtel, HDFC, GAIL India, SBI and Sun Pharma.
On the gaining side, Tata Power is the top Sensex gainer, up almost 3% in otherwise subdued market after the Maharashtra Electricity Regulatory Commission increased fuel adjustment cost ceiling to 20% from 10%.
The broader indices are trading marginally lower – BSE Midcap and Smallcap indices are down 0.3-0.5%.
The market breadth has weakened further with 1,605 declining and 1,016 shares advancing.