JOIN USMarkets go yo-yo wary of a fractured mandate at Centre
The stock market closed the volatile session on negative note due to profit booking after strong rally in previous session on jitters of fractured mandate in the Lok Sabha polls.
Worries that a weak coalition could emerge kept investors wary, after the market rose on Tuesday on speculation the Bharatiya Janata Party (BJP)-led opposition group, seen as market friendly, was gaining momentum. Metal, IT and FMCG counters bore the brunt of selling as the benchmark Sensex ended 138 points lower despite good institutional buying amid narrowly mixed global trends.
Wary operators
Doubts on government formation continued to daunt market sentiment as wary operators and retail investors booked profits at higher levels after the recent bull run, a broker said.
Even though exit polls have been unreliable in the past, traders hope they could provide clues about the trend. Results of the month-long general election will be known on Saturday.
The benchmark indices of BSE and NSE plunged on the back of huge selling witnessed during trading, as investors were cautious over stability factor at the Centre. Mixed US Index futures also contributed to the uncertainty and combination of all dented sentiments in Dalal Street. “The market was highly volatile and jittery ahead of the big event on Saturday, that is election results. The smart guys are booking profits in this market,” Ashika Stock Brokers Research Head Paras Bothra said.
Positive undercurrent
“The undercurrent is still positive, but since the election results are just around the corner, investors are booking profits as we have had a very good rally recently,” Angel Stock Broking Head—Research Hitesh Agrawal added.
The 30-share BSE index shed 1.14 percent, or 138.38 points, to 12,019.65, a day after climbing to its highest close in seven months. Twenty-three stocks fell as the index swung between 1.8 per cent drop and a rise of 0.8 per cent.
Key indices Sensex and Nifty plunged below 12,050 and 3,650 levels respectively, while sectorally all indices ended in red barring consumer durables stocks. Mid Cap and Small Cap stocks also remained out of favour. BSE Mid Caps and Small Caps closed with losses of 4.79 and 20.50 points at 3,741.45 and 4,220.21 respectively. The broader based Nifty at NSE was down by 45.85 points or 1.25 per cent to settle at 3,635.25 in the closing.
Nifty May 2009 futures were at 3,629 at a discount of 6.25 points as compared to spot closing of 3635.25 on the previous day, while turnover in NSE’s futures & options (F&O) segment surged to Rs 64,035 crore from Rs 53,677.79 crore on Tuesday.
BSE clocked a turnover of Rs 9.767 crore, which is lot higher than Rs 4,943.62 crore on May 12, 2009, and could be due to a large block deal in realty major DLF for Rs 3,860 crore. The market breadth indicating the overall health of the market remained negative as 1,336 stocks closed in red while 1,154 stocks closed in green and 91 stocks remained unchanged in BSE. As far as Sensex pack, 22 stocks ended in red territory and 8 scrips in green.
Foreign institutional investors (FIIs) continued buying and pumped in Rs 452.18 crore on May 12 while domestic funds picked up shares worth Rs 177.74 crore on the same day, as per provisional data. The benchmark has jumped more than 50 per cent from its 2009 low in early March, in step with global rally, and stable government might spark more upside as the economy is expected to recover in the latter half of the year, analysts said. Indian shares are not cheap after the rally, but will get a boost if a strong government emerged in the elections and jump-started spending on infrastructure projects, another analyst added.