Weak Europe cues lead to slump on D-Street

Weak Europe cues lead to slump on D-Street

Key benchmark indices, on Wednesday, edged lower to reach their lowest closing level in more than a week as weakness in European stocks triggered profit booking on the domestic bourses after recent strong rally in share prices.

Apart from weak European cues, jobs data too dented the investor sentiment in last hour of trade in D-Street.  The market saw its biggest fall this day from the last 16 sessions led by heavy sell-off in banks, metals, telecom and infrastructure stocks.

Except for IT Index, all the other 12 sectoral indices on BSE were in the red. Analysts maintain profit booking may be one of the reasons behind the day’s fall as the Nifty had rallied more than 500 points since the previous biggest correction of 117.4 points to close at 5087.3 on January 30, 2012.

Also, they view that the rally was completely liquidity driven as foreign institutional investors have been pumping in more and more money in emerging markets (they bought over US$4.5 billion worth of shares since January) and not because of any great change in fundamentals.

The popular Sensex at BSE lost 283.36 points or 1.54 per cent  to settle at 18,145.25, its lowest closing level since February 14, 2012. The index jumped 95.17 points at the day’s high fell 332.80 points at the day’s low.

The 50-unit S&P CNX Nifty lost 101.80 points or 1.82 per cent to settle at 5,505.35, its lowest closing level since February 14, 2012. Nifty hit a high of 5,629.95 and a low of 5,491.35 in intraday trade.

From broader markets, the BSE Mid-Cap index tumbled 3.46 per cent and the BSE Small-Cap index shed 3.24 per cent. Both these indices underperformed the Sensex.

The market breadth, indicating the overall health of the market, was weak with as many as 2,208 share on BSE fell and 769 shares rose while a total of 106 shares remain static.   BSE clocked turnover of Rs 3839 crore, higher than Rs 3537.89 crore on Tuesday.