Weighed down by weak global markets and worse-than-expected corporate earnings, Indian stocks plunged for the sixth day in a row. The Bombay Stock Exchange's Sensitive Index, or Sensex, dropped to its lowest level in more than two months.
The Sensex had opened on a shaky note at 15,838.63 but managed to recoup all the losses and rebound into the positive terrain for a short while to touch a high of 15,957.06. However, the weak opening of the European markets, coupled with subdued Asian markets, pushed the index into the red and slip to a low of 15,330.56. Intraday volatility on the bourses was high and the index moved in the range of 627 points in the day.
The BSE benchmark index finally ended at 15,405, down 491 points, or 3 per cent. The Sensex is down 12 per cent from the Muhurat day trading high of 17,493.
The CNX Nifty finally settled with losses of 147.80 points, or 3.14 per cent to end at 4,563.90. The index closed below the 4,600-mark for the first time since September 3.
Huge losses in index heavyweight Reliance Industries dragged the markets deeper into the red. The stock contributed 122 points to the fall and the scrip slumped 5.7 per cent to Rs 1,821 on reports that the Comptroller and Auditor General has set up a team to examine the expenses RIL incurred on its D6 natural gas field in the Krishna-Godavari basin in the Bay of Bengal.
Hindalco and Reliance Communications were the other prominent losers after they reported declines in profit. While Hindalco sank 11 percent after it reported a 52 per cent drop in second-quarter profit on lower metals prices, Reliance Communications fell 5.7 per cent after it reported second-quarter earnings that missed analysts' estimates.
Gul Tekchandani, investment consultant said, "The markets are behaving on expected lines and they are moving towards the 14,000-level mark." Tekchandani added that he expected the markets to fall further and any relief rally will attract more selling.
The BSE Midcap and the small cap indices also bore the brunt of heavy selling, down 3.7 per cent and 4.5 per cent, respectively.
All the sectoral indices ended in the red. The BSE realty index was hammered badly, down 9.7 per cent. Some of the other prominent sectoral losers where heavy selling took place were metal (6 per cent), oil & gas (4 per cent), power (3.5 per cent) and IT (3.4 per cent) indices.
Among the BSE-30 stocks, the prominent losers were DLF (9 per cent), Jaiprakash Associates (7.5 per cent), Sterlite (6.4 per cent), ACC (6.2 per cent) and Reliance Infrastructure (6 per cent), respectively.
Reliance, Reliance Communications, Tata Steel, Wipro, SBI, HUL, Hero Honda and Mahindra & Mahindra declined 3-6 per cent each.
However, stocks like Bharti Airtel (up 2.6 per cent), Maruti Suzuki (1.1 per cent) and Sun Pharmaceuticals (0.3 per cent) bucked the weak trend.
The market breadth was extremely negative. Out of 2,761 shares traded, 2,171 declined, 534 advanced and 56 were unchanged on the BSE.
