Mirroring Asian peers, the Indian stock market closed in the red for a third straight session. However, bargain hunting and a couple of index heavyweights reversing their losses during the session helped sharp bounce back in the market from day’s low.
The benchmark Sensex and Nifty opened weak and continued to their slide on heavy selling. At one point of time Sensex was down 776 points to 51802. Similarly, the Nifty touched lows of 15,513, down by 233 points. However, continued buying in Bharti Airtel, Tata Steel, IndusInd Bank, ICICI Bank helped markets to recover.
Dealers from the trading desk believe there are three major reasons for the current weakness in the market. One, aggressive selling by the foreign portfolio investors (FPI). The FPIs have sold shares worth Rs16,204 crore in the cash segment and one-fourth of it in the previous two sessions. Two, weakness in the Asian market, primarily in Hong Kong as the Chinese government has enforced restrictions on its technology giants to prevent monopoly. The third reason is the concerns surrounding economic growth. On Tuesday, the International Monetary Fund (IMF) cut India’s economic growth estimates to 9.5 per cent from 12.5 per cent.
At the close, Sensex ended 135.05 points at 52,443.71, while the Nifty slipped 37.05 points to 15,709.40. Kotak Bank was the top loser in the Sensex pack, shedding over 2 per cent, followed by Dr Reddy’s, M&M, PowerGrid, NTPC, Nestle India and HDFC Bank.
All sectoral indices, except the Metals, ended with losses. The market breadth – a ratio of shares closing with gains to those ending in red – was negative. The BSE Mid-Cap index was flat and the BSE Small-Cap index slipped 0.45
Maruti Suzuki, India’s largest carmaker, announced its June quarter results that were below market expectations. Profit booking pulled down Maruti shares by 1.26 per cent. Kotak Bank witnessed profit booking after the results while IndusInd bank gained after better than expected numbers. Index heavyweight Reliance Inudstries continued to decline after its results on Friday.
