Sensex slumps...Nifty ends below 200DMA

After remaining relatively calm through most of the day the Indian markets caved in during the last one hour, forming a Sanctum of bears. Heavy selling was seen across the board with the NSE Nifty nose-diving below its 200 DMA and the BSE Sensex cracking by almost 300 points.

The weakness was accentuated by the F&O expiry as traders seemed to rollover their short positions to the next month’s series amid persistent uncertainty over the near-term prospects for the Indian markets. The Nifty and the Sensex fell by about 8% each during the January series.




"Market sentiment was weak for the second straight session after the RBI hiked interest rates by 25 bps and raised its inflation forecast for FY11. There are fears of at least another 50 bps increase over the next six months. Meanwhile, a string of below par results dampened investor confidence. India was perhaps the worst performer in Asia, where the Chinese market led the rally with 1.5% gain. Nifty witnessed VAP based selling and the Nifty rolled only 56% (prov) as against 61% last series and the market wide rollovers were seen at 74% (prov) versus 86% last month", says Amar Ambani, Head of Research (India Private Clients) - IIFL.

The BSE Sensex slipped 285 points to close at 18,684 and the NSE Nifty lost 83 points to end at 5,604.

All the BSE sectoral indices ended in the red, the BSE Realty index was the top loser, the index lost 3.6%, BSE Pharma was down 2.6% and BSE Metal index was down 2%. The BSE Mid-Cap index lost 2% and BSE Small-Cap index lost 1.4%.

Outside the frontline indices, the big losers in the broader market were LITL, Ivrcl Infra, Union Bank and Andhra Bank. On the other hand, gainers included GTL Infra, Motherson Sumi, Marico and Areva.