The markets started off flat but crashed into the red on bouts of selling. The Nifty has fallen for five days on a trot. Its fall below 5,500 levels is worrisome as these levels were last seen in September 2012.
Dealers attribute today’s market sell-off to selling by London-based exchange traded funds. Fears of poor Q4 earnings is another reason cited for their exit.
Amar Ambani, Head of Research, IIFL, attributed the near 100 points fall from Nifty’s intra-day high to selling by foreign institutional investors. “Index stocks witnessed sharp cuts as FIIs continue to pull out money from India-dedicated funds. Global fund managers have been pulling out funds from emerging market equities and deploying the same in US and Japanese markets,” he stated.
The Sensex closed down 211 points at 18,226 while the Nifty ended down 48 points at 5,495. The BSE Small-Cap index and BSE Mid-Cap index closed flat down 0.8% and 0.1% respectively.
The markets are now focussing on Wednesday’s Federal Reserve policy minutes to look for cues on its intent going forward. India Infoline feels the probability of a cut-back in monetary stimulus has faded, especially after disappointing March non-farm payroll data.
Global round-up: Asian markets ended flat in trade today. European markets are trading flat with a positive bias.
F&O buzz: Fresh shorting was seen in Nifty futures today with open interest rising about 10%. Put unwinding is seen in the 5500 strike which shed 1.5% open interest. Among sectors, fresh shorts were seen in banking, infrastructure and oil and gas
A technical perspective:
The advance-decline ratio favoured the bulls today with 1,127 stocks advancing for every 567 declines. Around 767 stocks remained unchanged.
Volatility as measured by India VIX surged 0.29% to close at 16.82. It hit a day’s high of 17.26 and day’s low of 15.82.
Stock in news:
TVS Motor Company was the major loser in trade today. It ended down 11.5% at Rs 35.15. Reports suggest the company’s market share slipped over 2.5% to 15.46% since FY08. News that Honda Motorcycle and Scooters India has dislodged TVS from its number three position weighed on sentiment.
Wipro shed around 12% after the company demerged its non-IT businesses like consumer care and lighting to a new company. It will now focus only on information technology.
Bharat Heavy Electricals ended 2.1% down at Rs 178.5 on lower provisional FY13 earnings.
JSW Steel ended 1.4% lower despite its in Q4 crude steel production rose 2% at 2.11mt from 2.07mt. The share closed at Rs 662, down Rs 9.5 or 1.4%.
On the positive side, Maharashtra Seamless surged after its boards approved a Rs 1 billion share buy-back. The stock closed at Rs. 225, up Rs.11.3 or 5.2%.
Dhanleela Investments, Modipon, Turbotech Engineering, Indian Link, and Swadeshi Industries hit fresh 52-week highs while ABB, Banco Products, Raymond, SPML Infra, and Tokyo Plast hit a new low.