Indian benchmark indices witnessed a bloodbath on Tuesday aided by falling global crude oil prices and political uncertainty in Greece. Bears had a field day on the fourth trading day of the New Year as the Sensex slumped 854.86 points to close at 26,987.49 while the Nifty ended points 251.05 points lower at 8127.35.
“The sharp correction in the market was mainly driven by falling global crude prices, implying weakness in global demand; and concerns over political uncertainty in Greece,” Lalit Thakkar, MD, Institution, Angel Broking, said.
“A confluence of events seems to have taken the wind off the markets on Tuesday. The crash in oil prices, the tumble in Euro on account of the Greek situation and general apprehensions regarding growth led to sell-off globally. The results will be the next trigger for individual stocks but market direction will hinge largely on global market movement,” Amar Ambani, Head of Research, IIFL said.
Biggest movers
While 1,341 stocks declined on the NSE, 212 stocks advanced and 36 remained unchanged. Jindal Steel was the biggest loser on the Nifty, down 7.03 per cent to Rs 151.40 with volumes of 97.3 lakh shares.
Other major losers included ONGC (down 6.06 per cent to Rs 331.75), Sesa Sterlite (down 5.32 per cent to Rs 208.10), Tata Steel (down 5.11 per cent to Rs 395.40).
A couple of stocks reversed the trend and managed to end in the green.
These included Hindustan Unilever (up 1.54 per cent to Rs 772) and Coal India (up 0.07 per cent to Rs 380.50).
All the 12 sectoral indices ended in the red with losses around 1.4 per cent to 4.2 per cent. BSE Oil & Gas index, down 4.2 per cent ended with the highest losses followed by BSE Realty, BSE Metal, BSE Capital Goods indices closing down 3.6 per cent, 3.5 per cent and 3.2 per cent respectively. BSE FMCG Index, down 1.4 per cent, lost the least.
Market players believe that the correction on Tuesday provides a good buying opportunity as markets will continue to provide good returns in the long term. "We believe that Tuesday's correction in the market provides a good buying opportunity in the light of momentum of policy reforms and a fall in inflation and on anticipation of a rate cut by the RBI. Further, Indian companies are expected to post healthy earnings growth on account of the aforementioned factors, which would be favourable for the domestic equity markets, going forward," Lalit Thakkar of Angel Broking said.
"In the near term, mixed set of quarterly numbers and global volatility are likely to restrict significant gains in markets. Government's action on getting reforms on track (within or outside the budget), as well as potential decline in interest rates are the likely triggers for a further re-rating in the medium-to-long term," Dipen Shah, Head of Private Client Group Research, Kotak Securities, said.
