Sensex dips 229 pts on profit booking

Sensex dips 229 pts on profit booking

Sensex dips 229 pts on profit booking

Profit booking, global market trends and anxiety on the eve of the second quarter results resulted in the BSE benchmark 30-share index - Sensex - falling by 229 points, or 1.2 per cent, on Monday, the biggest one-day loss in 10 weeks. The NSE S&P CNX Nifty also declined sharply by 71 points.

Reliance Industries witnessed the steepest fall of 4.51 per cent due to a downgrade to “underweight” by Morgan Stanley. Other notable stocks that fell included Hindalco Industries (3.52 per cent), BHEL (3.44 per cent), L&T (3.09 per cent) and Tata Motors (2.87 per cent).

Real estate developer DLF fell 7.3 per cent due to allegations surfaced of “questionable” deals it had Robert Vadra, the son-in-law of Congress President Sonia Gandhi.

The fall was however seen more as a consolidation and a timely one. The Chief Executive Officer of Ambit Investment Advisors Pvt Ltd Andrew Holland said, “It is merely a consolidation, after the markets had a great run. Also, the fall is in line with global markets that were weak today.”

An analyst at Kotak Securities said that the fall is normal. “It is due to profit booking after a fairly good run for about four weeks, we shouldn’t be reading more into it,” said Dipen Shah.

Holland said that as the quarterly earnings begin flowing over the next few days, there could be some anxiety on the part of investors. Analysts felt that the correction could extend to few more trading sessions.

Sectoral indices mirrored the fall in Sensex; however capital goods index and oil & gas index fell more, by 307 and 245 points respectively. Metals, automobile and bank stocks also declined significantly on a day when the Finance Minister admitted that though sentiments have not “deteriorated”, India Inc is in a “wait and watch” mode.

Equity market dips

European markets were trading on a weak note as concerns over the global economic outlook and its impact on the coming corporate earnings season weighed on investor sentiment in D-Street here.  Also, the World Bank cut its estimate for East Asian growth including China which has neutralised some of the positive sentiment that followed Friday’s sharp drop in US unemployment for September.

Even as the day’s trade started with telecom stocks surging on renewed buying, while bank stocks declined. IT stocks fell on recent strong gains in rupee against the dollar, while capital goods pivotals declined on profit booking after recent strong gains.

But Bonanzo Portfolio's Nid’hi Saraswat viewed it differently saying, “Selling pressure in heavyweights led to fall of over 1 per cent today. Lower opening of European indices as well as weaker US Futures also hit sentiment.”

The market breadth, indicating the overall health of the market, was negative with as many as 1,515 shares on BSE fell and 1,383 scrips rose while a total of 115 stocks remained static.

DH Newsletter Privacy Policy Get top news in your inbox daily
GET IT
Comments (+)