Sensex tanks 378pts ahead of Muhurat trading; RIL, ITC drag

Moneycontrol Bureau

The market extended sell-off in last hour of trade on Tuesday with the Nifty closing below 7800-mark (for first time since September 29) ahead of Diwali Muhurat trading session. The Sensex shed more than 400 points intraday, tracking global weakness on fears of likely US interest rate hikes in December. Investors also worried about global economic growth.

The 30-share BSE Sensex lost 378.14 points or 1.45 percent to 25743.26 and the 50-share NSE Nifty plunged 131.85 points or 1.67 percent to 7783.35, continuing weakness for the fifth consecutive session today.

"Apart from the setback that the ruling government faced in Bihar elections, negative global cues are also weighing in on investor sentiments. The increasing odds in favour of a December fed rate lift-off continues to unnerve investors," Sanjeev Zarbade, Vice President, Private Client Group Research, Kotak Securities said.

According to him, investors should consider accumulating quality stocks during such periods of market corrections.

The broader markets also caught in bear grip as the BSE Midcap and Smallcap indices were down 1.7 percent and 0.8 percent, respectively. The market breadth was weak as about 1588 shares declined against 1028 advancing shares on the BSE.

Equity market will remain opened on Wednesday for Diwali Muhurat trading session that will be for 60 minutes (between 17:45 to 18:45 hours IST). On Thursday, the market will remain shut for Diwali Balipratipada holiday.In Samvat 2071, the Sensex lost 3.9 percent and the Nifty shed 2.7 percent on FIIs selling, global growth concerns (especially China), fears of likely Fed rate hike, earnings downgrade, lack of government reforms etc.

Globally, Asian markets like Hang Seng, Kospi and Taiwan Weighted declined more than 1 percent at close today while Shanghai and Nikkei ended flat. European markets like Britain's FTSE, France's CAC and Germany's DAX were trading 0.4 percent lower.

On home turf, index heavyweights drove the market lower today. Oil, technology, pharma, metals and select banking & financials dragged while auto stocks bucked the trend.

Dr Reddy's Labs plunged 4.8 percent after Citi downgraded stock to neutral. The brokerage cut FY16-18 EPS by 5-12 percent and also slashed target price to Rs 3,775 (from Rs 4,975) after USFDA warning.

ONGC was the biggest loser on Sensex, down 4.9 percent followed by Infosys, Lupin, ITC, HDFC, HDFC Bank, Sun Pharma, SBI, Vedanta and BHEL with 1-4 percent loss. Coal India was down 3.8 percent ahead of Q2 earnings due on Friday.

Maruti Suzuki, Mahindra & Mahindra, Hero Motocorp and Bajaj Auto gained more than 1 percent. Tata Motors also traded higher intraday but erased gains in late trade, down 0.8 percent.

In earnings, Hindalco Industries was down 0.4 percent after Q2 earnings. Profit surged 31 percent led by other income despite sharp 33 percent fall in operating profit.In new listing, InterGlobe Aviation ended 15 percent higher today. The promoter company of low-budget airline IndiGo saw good investor appetite on its first day on bourses. The stock opened at Rs 868 per share on the NSE, up 13 percent from issue price. On an intraday basis, the stock jumped 18 percent.