Sensex slumps on late sell-off

Major headlines

Food inflation eases to 16.24%

International Monetary Fund ups growth outlook to 9.7%

Tata Communications rings loud on expansion; the stock closes 2.69% higher



Indian indices

Bulls were beaten by the bears in today’s trade as the domestic markets fell the most in six weeks. The markets witnessed a decline as investors judged recent gains may have exceeded the outlook for earnings growth. There was heavy selling in the final hour, stocks had a free fall and sent the key indices - Sensex and Nifty - down to a sharply negative close. Weakness in Asian and European markets ahead of a crucial rate decisions and economic reports triggered the sell-off. Substantial decline was noticed in the last one hour of the trades and almost all sectoral indices closed in the red.

Food inflation softened to 16.24% for the week ended September 25, 2010 as compared to 16.44% seen in the previous week.

Tata Steel, the nation's biggest producer, dropped the most in four months. Infosys Technologies, a software services exporter that gets a fifth of its sales in Europe, lost by 1.8%.

The Sensex began the session on a flat note, mere one point higher at 20544, tracking unsupportive global cues. In few minutes of trade, the index hit the day's high of 20581. However, the index slipped from the day’s high and traded in the negative terrain. The Sensex witnessed a lacklustre session and traded lower throughout the morning trades as the profit booking emerged in some sectors and index heavyweights. In the afternoon session, the index continued its downward trend as the sentiments were dampened after the negative opening in the European markets. In the last hour of trades, the Sensex hit the day’s low of 20273 as selling intensified in realty, metal and information technology (IT) stocks.

At the closing, the Sensex ended at 20315, 228 points lower. The Nifty closed at 6120, 66 points down.

Bonds and Rupee update: India's ten-year bonds declined for the fourth time in five days on speculation that the demand for existing securities will wane ahead of a debt auction tomorrow (October 08, 2010). India's rupee rose to the strongest level in more than two years on speculation that the foreigners will pour more funds into the nation's equities to profit from an improving outlook for Asia's third-largest economy.

Market Outlook: We have initial jobless claims and same store sales data in the US tonight.

Global signals

The European markets edged little higher as investors cheered economic data with Bank of England and European Central Bank keeping the interest rate unchanged.

The Asian markets ended lower, except Hang Seng. Market in China was shut today.

The US stock index futures point towards a flat start on the Wall Street.

Market sentiment

The market breadth was unconstructive, as falling stocks outnumbered the gaining ones. Of the 3,080 shares traded on the BSE, 1,805 trailed whereas 1,182 rose. Ninety-three shares traded unchanged.

Sectoral & stock screening

Of the 13 sectoral indices, 12 closed lower while BSE Health Care (HC) was exceptional that closed higher by 0.34%. BSE Realty was the worst performer, down by 2.80%, followed by BSE Metal that fell by 1.70% and BSE IT declined by 1.30%.

Among 'A' group stocks, top three gainers were - Biocon gained by 5.67%, followed by Adani Enterprises that surged by 4.51% and IRB Infrastructure Developers rose by 4.10%. Top three losers were - Tata Steel slid by 4.20%, followed by Indiabulls Real Estate that fell by 4.17% and Unitech lost by 3.85%.

Viewing volumes

Leading financial services and real estate development company - Indiabulls Financial Services was traded the most, with over 1.78 crore shares changing hands on the BSE, followed by the country's largest hydro power generator - NHPC (0.64 crore shares), industrial finance company - IFCI (0.60 crore shares), India's second largest developer - Unitech (0.33 crore shares) and diversified infrastructural industrial conglomerate - Jaiprakash Associates (0.46 crore shares).