Sensex slides 426 points, bank stocks plummet
A benchmark index of Indian equities markets Monday fell 426 points as negative global cues and uncertainty about the upcoming monetary policy review marred investors' sentiments.
Interest-sensitive stocks like banks, capital goods and consumer durables came under heavy selling pressure, leading to the fall in the barometer index to its lowest levels since September 2013.
Only last week, the benchmark index touched its record closing high of 21,374 points on back of healthy buying by foreign institutional investors (FIIs).
The sharp fall in Monday's trade was attributed to the uncertainty surrounding a possible reduction of US monetary stimulus by the Federal Reserve.
Last week's warning by the Reserve Bank of India (RBI) against high inflation levels also dampened investors' sentiments.
The RBI will decide on the key policy rates in its next monetary review on Jan 28, depending on headline inflation and growth figures.
The 30-scrip S&P Sensex of the Bombay Stock Exchange (BSE), which opened at 20,899.03 points, closed at 20,707.45 points, down 426.11 points or 2.02 percent from its previous day's close at 21,133.56 points.
The Sensex touched a high of 20,899.03 points and a low of 20,688.03 intra-day.
The wider 50-scrip Nifty of the National Stock Exchange (NSE) closed trade 130.90 points or 2.09 percent down at 6,135.85 points.
Heavy selling pressure was observed in banks, metals, capital goods, oil and gas and consumer durables stocks.
In Monday's trade, the S&P BSE bank index fell 499.10 points followed by metal index which was lower by 365.89 points, capital goods index, down 259.87 points, oil and gas index declined 205.20 points and consumer durables index was lower by 106.17 points.
The major gainers were: Hindustan Unilever, up 1.71 percent at Rs.575.55; ITC, up 0.08 percent at Rs.324.45; and Cipla, up 0.04 percent at Rs.415.
The main losers were: Tata Motors, down 6.13 percent at Rs.347.80; Tata Steel, down 6.03 percent at Rs.353.75; ICICI Bank, down 4.53 percent at Rs.1,010.05; Tata Power, down 4.16 percent at Rs.72.60; and Maruti Suzuki, down 4.02 percent at Rs.1,701.35.
Among the Asian markets, Japan's Nikkei closed 2.51 percent down, and Hong Kong's Hang Seng lost 2.11 percent. However, China's Shanghai Composite Index gained by 1.30 percent.
In Europe, London's FTSE 100 was trading 1.37 percent down. Germany's DAX Index was lower by 0.38 percent and the French CAC 40 Index lost 0.23 percent.
(Posted on 27-01-2014)