Sensex Snaps Two-Day Rally ; Slips 75 PointsMumbai, Dec 23: After two days of continuous gains, the stock market today suffered mild losses and its barometer Sensex slipped 75 points, dragged by the market leader Reliance Industries and some banking blue-chips.The BSE's
Mumbai, Dec 23: After two days of continuous gains, the stock market today suffered mild losses and its barometer Sensex slipped 75 points, dragged by the market leader Reliance Industries and some banking blue-chips.
The BSE's 30-share benchmark index, the Sensex, settled at 15,738.70 points, down 74.66 points or 0.47 per cent from its previous close.
The index had gained more than 600 points in the past two days, but only after a huge fall of over 800 points in the five consecutive trading sessions.
The analysts said that the key reason behind today's downward move was profit booking after the two-day surge in shares of Reliance Industries, the country's most valued firm, and that of banking majors like HDFC Bank, ICICI Bank and SBI.
Besides, some other blue-chips like Infosys, Bharti Airtel and NTPC also lost value and added to the Sensex fall.
A few stocks, such as Wipro, BHEL, HUL and Tata Motors managed to buck the trend and posted some gains.
The overall market breadth was, however, positive as more than 53 per cent stocks managed to close with gains, as against 41 per cent ending the day with losses. The remaining six per cent remained unchanged in today's trade.
The concerns over a slowdown in the country's economic growth also hurt the investor sentiments, which have been anyway low for quite some time, and the positive cues from Asian and European markets also did not reflect on the bourses here.
Acknowledging that the economic situation was difficult, Finance Minister Pranab Mukherjee said this morning that the economy was likely to clock a growth of about 7.5 per cent in the current fiscal.
“When I am talking of 7.5 per cent, I am not disappointed ... Situation is difficult... At the same time, we have the capacity and resilience to overcome the difficulty,” Mukherjee said. The economy grew by 8.5 per cent in 2010.
The markets had opened on a positive note this morning and managed to stay in the green till early afternoon, but lost ground thereafter to end the day with losses.
At one point of time, the Sensex was trading with a gain of nearly 100 points, while it also witnessed intra-day losses of about 140 points earlier in the day.
The National Stock Exchange's 50-share index, Nifty, also fell by 19.85 points to close at 4,714 points.
“After two consecutive days of rally, the Sensex opened with an upside gap today, following surge in the global markets. High volatility ruled the market and even a firm opening in European markets failed to cheer our markets,” Bonanza Portfolio's Shanu Goel said.
Inventure Growth and Securities' Research head Milan Bavishi said that FII trading activity figures for the the last two weeks suggests that overseas funds have been net sellers in the stock market.
“It also shows that investor sentiment is worsening. However, we have not seen any big sell-off as yet. If that happens then we could see further downside risks to the overall indices,” Bavishi noted.
Among the sectoral indices, banking, energy and consumer durables were among the worst hit, while some modest gains were seen in the auto, realty and capital goods segments.
Analysts said that the traders and investors booked profit amid persistent selling by foreign funds, despite a firm trend in global markets, as concerns over domestic economy weighed heavily on the sentiments.
RBI Governor D Subbarao had also said yesterday that economic growth rate for the current fiscal is projected at 7.6 per cent as against earlier projections of 8 per cent.