Sensex slips 240 points; capital goods stocks plummet
A benchmark index of Indian equities markets Friday fell by 240 points or 1.12 percent, as interest sensitive stocks like capital goods and banks came under heavy selling pressure in the backdrop of upcoming monetary policy review.
The 30-scrip S and P Sensex of the Bombay Stock Exchange (BSE), which opened at 21,289.15 points, closed at 21,133.56 points, down 240.10 points or 1.12 percent from its previous day's close at 21,373.66 points.
The Sensex touched a high of 21,333.66 points and a low of 21,123.99 intra-day.
The wider 50-scrip Nifty of the National Stock Exchange (NSE) closed trade 78.90 points or 1.24 percent down at 6,266.75 points.
The bearish sentiment in the markets prevailed after the apex bank warned against high inflation levels, a week before the next monetary policy review to be held on Jan 28.
The Reserve Bank of India (RBI) will decide on the key policy rates in its next monetary review depending on the level of headline inflation and growth figures.
"Next week will have the important RBI policy meeting apart from results of various large companies. We expect RBI to hold rates in this meeting on the back of moderation in headline CPI (consumer price index) and WPI (wholesale price index) data," said Dipen Shah, head of private client group research, Kotak Securities.
"However, the core inflation will need to moderate, for the RBI to change its monetary stance."
Heavy selling pressure was observed in capital goods, banks, automobile, metals and consumer durables stocks.
In Friday's trade, the S and P BSE capital goods index fell 265.30 points followed by bank index which was lower by 240.70 points, automobile index, down 191.16 points, metals index declined 169.98 points and consumer durables index was lower by 152.03 points.
The major gainers were: NTPC, up 0.38 percent at Rs.131.60; Bajaj Auto, up 0.20 percent at Rs.1,940; and Reliance Industries, up 0.11 percent at Rs.867.
Ranbaxy Laboratories shares plunged after US drug regulator banned more of its products. The company's scrip at the BSE fell by 19.54 percent or 81.50 points at Rs.335.65 from its previous day's close of Rs.417.15.
The main losers were: BHEL, down 3.39 percent at Rs.165.10; Tata Steel, down 3.26 percent at Rs.376.45; Tata Motors, down 3.26 percent at Rs.370.50; Sesa Sterlite, down 2.92 percent at Rs.202.75; and Larsen and Toubro (L and T), down 2.63 percent at Rs.1,005.85.
Among the Asian markets, Japan's Nikkei closed 1.94 percent down, and Hong Kong's Hang Seng lost 1.25 percent. However, China's Shanghai Composite Index gained by 0.60 percent.
In Europe, London's FTSE 100 was trading 0.71 percent down. Germany's DAX Index was lower by 0.77 percent and the French CAC 40 Index lost 1.04 percent.
(Posted on 24-01-2014)