Terrifying Thursday: Sensex tanks 454 points

It was a horrible day for markets, with the Sensex ending 454 points lower on the back of panic selling by investors

Major headlines

Food inflation rises to 8.69%

Rallis India buys 53.5% stake in Metahelix life; the stock ends 2.69% lower

IRB Infrastructure denies price rigging reports; the stock closes 0.95% higher



Indian indices
Bears were charged up all through the day and dragged the Indian markets to end today's session deep in red. A massive sell-off was seen across the board as investors pressed the panic button citing reasons like political instability and series of scams. Fears of foreign fund withdrawals in the absence of any positive trigger also led the Indian markets fall drastically.

The Sensex shed more than 500 points during the day. The Nifty closed below 5800 - another psychologically important level, which even tested 5750 level in an intraday trade. Several stocks locked at lower circuits, which pushed the BSE Midcap and Smallcap indices down by 4.48% & 5.92%, respectively.

Financial, metal, realty, telecom, oil & gas and auto companies' shares took heavy beating on the exchanges followed by Midcaps and Smallcaps as well. Broader indices saw big crack today, in fact more than benchmarks. In Midcap space, StanChart IDR, Amara Raja Batteries, Kirloskar Brothers, IRB Infrastructure and Den Networks gained between 0.5-2.5% while Glodyne Technoserve Developers, Sunteck Realty, Amtek Auto, Hindustan Oil Exploration, KS Oils and Gitanjali Gems crashed in the range of 12.5-20%.

The Sensex began the session 50 points higher at 19746 and soon hit the day's high of 19771 in initial trade. The index slipped from the day’s high and traded in the negative zone all through the morning session. The Sensex continued its southbound journey in the afternoon session owing to heavy selling across the board. In late trade, the Sensex hit the day’s low of 19161 as huge sell-off was witnessed especially in consumer durables and realty stocks.

At finishing line, the Sensex closed at 19242, down by 454 points and the Nifty shut 137 points lower, at 5767.

Bond & Rupee update: India’s 10-year bonds dropped for a second day before the central bank buys back Rs120 billion ($2.7 billion) of securities to ease a cash crunch in the banking system.

Market sentiment

The market breadth was terribly weak as losing stocks outdid the advancing ones over six times. On the BSE, out of the 3,048 stocks, falling stocks were 2,493, while rising stocks were 406. Hundred and forty-nine stocks remained unchanged.

Sectoral & stock screening

All the 13 sectoral indices nosedived and closed with huge losses, but BSE Information Technology (IT) bucked the trend and rose marginally by 0.03%. The BSE Consumer Durables (CD) was worst hit for the second straight day, declined by 6.29%, followed by BSE Realty down by 4.76% and BSE Metal slipped by 3.67%.

Looking into 'A' group stocks, IRB Infrastructure Developers was the top gainer, rose by 0.95% after the company clarified on price rigging reports, followed by Container Corporation of India and Wipro which surged by 0.67% each. Among losers, Hindustan Oil Exploration Company slid the most by 12.69%, followed by Pantaloon Retail down by 11.45% and Uco Bank declined by 10.35%.

Viewing volumes

Industrial finance company - IFCI was the most traded, with over 0.54 crore shares changing hands on the BSE, followed by India’s second largest developer - Unitech (0.35 crore shares), wind turbine major - Suzlon Energy (0.34 crore shares), Indian ship builder - Pipavav Shipyard (0.31 crore shares) and leading DTH service provider - Dish TV India (0.31 crore shares).

Global signals

The European markets surged on optimism US tax cuts would boost consumption, with technology stocks boosted after ASML lifted its booking forecast.

The Asian indices closed higher except Shanghai Composite down by 1.32% on concerns that central bank will increase interest rates over the weekend.

The US stock index futures point to a higher opening on the Wall Street as better-than-expected Japanese economic growth boosted sentiment.

Market outlook: Jobless claims data will be released in the US tonight.