Sensex drops on China's sharp fall, ends down 255 pts

The Sensex snapped a seven-day winning streak and closed sharply lower on the back of sell-off in heavyweights and weak global cues. Selling in technology, telecom, metal, private power, FMCG, select banking and infrastructure companies' shares dragged the Nifty below 4700. Fall across the globe was the main reason behind today's weakness. Shanghai started the decline in the early trade and as the day proceeded it extended its losses. It closed 6.7% lower at 2,667.745 and saw worst ever closing in the year 2009. It plunged 21.8% in the month of August and underperformed the other markets. Ba Shusong, deputy director of the State Council’s Development Research Center said that China’s economic growth may start to slow in the second quarter of the next year as the impact of government stimulus policies diminishes. Among the other Asian markets, Hang Seng and Straits Times fell 1.9% each. Jakarta and Kospi declined 1-1.5%. Nikkei fell 0.4% while Taiwan Weighted gained 0.24%. European markets were down 0.8% each and US index futures down 0.7% each, at the time of closing of Indian equities. The 30-share BSE Sensex tumbled 255.70 points or 1.61%, to settle at 15,666.64, after seeing an intraday low of 15,589.80. The 50-share NSE Nifty touched a day's low of 4635, before closing at 4662.10, down 1.48% or 70.25 points. Heavyweights like Reliance Industries, L&T, Infosys, Bharti Airtel and SBI dragged indices the most. The Nifty September futures were still at premium. The Nifty 4,600 Put and 4,900 Call saw big build-ups in today's trade. Sanjay Dutt, Quantum Securities has advised investors to book profits at current levels. He said, 30-35% of Nifty components were surrounded by uncertainties. On higher side, he said, Nifty was unlikely to go beyond 4750-4800 in the near-term. However, on the downside, he added, Nifty could go to 4450 and not 4100 levels. "We should stop somewhere around 4450-4550 on the Nifty and consolidate at that level before we get some more steam to actually take out the 4800 levels post sometime October-November", he said. Economy data The Q1 gross domestic product (GDP) growth numbers were in-line with estimates, stood at 6.1% versus growth of 5.8% in the previous quarter and 7.8% in Q1 of last year. CNBC-TV18 poll projected at 6.2%.  This story will be updated soon. Please check it in a while... On the next page - see how Indian markets performed in the last couple of hours _PAGEBREAK_ Sensex slips further; RIL, Infosys, ICICI Bk, L&T drag At 2.22 pm, the Sensex slipped further and didn't show any sign of recovery. Except realty index, all the other sectoral indices were trading negative. Heavy selling pressure was seen in metal, IT, FMCG, capital goods and oil & gas stocks. Stocks like Reliance, Infosys, ICICI Bank, L&T and HDFC were the negative contributors to the Sensex. The Sensex was down 265.45 points or 1.67% at 15656.89, and the Nifty was down 69.90 points or 1.48% at 4662.45. About 1524 shares advanced, 1331 shares declined, and 331 shares were unchanged. Anand Tandon, Director – Equities, Brics Securities, said the market was in fair value range. “The estimate is that we are at Rs 854 [earnings per share] for the year and at the higher end [of the P/E], which is about 18.5,” he said, adding that the likelihood was that earnings estimates would go up because the first quarter was good and monsoon may not impact companies’ earnings too much. “It then appears we are around 16.16.5 times rather than 18.5. Does that mean there is tremendous upside from here? Not likely but it could actually go back to about 18-18.5 times, so you may have 1,000 points or little more than that perhaps on the Sensex.” Top losers on the Sensex were Tata Steel at Rs 419.95 down 4.25%, ITC at Rs 229.20 down 3.19%, Hindalco at Rs 105.80 down 3.16%, TCS at Rs 525 down 2.87% and Bharti Airtel at Rs 422.80 down 2.76%. Index heavyweight Reliance was trading at Rs 2,016.55 down 2.6% from its previous close of Rs 2,070.30. Tech major Infosys was trading at Rs 2,136.00 down 2.36% from its previous close of Rs 2,187.65. Cigarette major ITC was trading at Rs 229.20 down 3.19% from its previous close of Rs 236.75. Nifty extend losses; IT, telecom, banks, metals decline At 13:18 hours IST - the Nifty remained under selling pressure on the back of negative global cues. Asian markets started falling in the early trade with Shanghai losing 6.7% while others did not fall in line with Shanghai and European markets were also trading 0.5% lower, which was putting pressure on the markets. The sell-off was seen in technology, telecom, banking, metal, auto (four-wheeler) and private power companies' shares. L&T, BHEL and Reliance Industries were also under pressure. However, buying in selective stocks like ONGC, NTPC, DLF, Cairn, Unitech, HDFC Bank, Siemens, BPCL, ABB, Grasim and Ambuja Cements capped the losses to some extent. The Sensex lost 215 points, to 15,708 and the Nifty fell 65 points, to 4,667. However, the broader indices were marginally in the green. The market breadth was positive; about 1653 shares advanced while 1203 shares declined on the BSE. Nearly 330 shares were unchanged. Maytas Infra locked at 5% upper circuit. Government said the company was only facing liquidity crunch and probe proved no prima facie accounting fraud in Maytas. Its current order book stood at Rs 7,000 crore and prima facie Rs 391 crore siphoned from Maytas to Satyam. It has cash profit of Rs 5 crore this quarter. In the telecom pack, Tata Communication, Idea Cellular, Bharti Airtel, Tata Teleservices and Reliance Communication fell 1-1.9%. Technology stocks like TCS, HCL Tech, Infosys and Wipro were down 2-2.9%. In the auto space, Bharat Forge, Ashok Leyland, Tata Motors, Maruti Suzuki, Apollo Tyres and M&M declined 0.8-2.9%. In the metals space, Hindalco, Sterlite Industries, Tata Steel, Jindal Steel, SAIL, JSW Steel and Sesa Goa slipped 2-2.9%. In the banking space, ICICI Bank, Axis Bank, SBI, Yes Bank and Kotak Mahindra were down 1-2%. Most active shares on the bourses were Unitech, Mahindra Satyam, Aban Offshore, DLF and Reliance Capital. Top percentage gainers - Compuage Info, Century Plyboard, ILandFS, Southern BioTec, Gujarat Industries Power, Pitti Lamination, Rane Holdings and FIEM Industries were up 11-20%. Top percentage losers - GM Breweries, SRF Polymers, Menon Bearings, SPICE, Banco Products, ETC Networks, WABCO-TVS and Surana Corp fell 5-8%. Sensex tumbles 200 points; Shanghai down 6% At 12.10 pm, the Sensex was trading weak and lost over 200 points. The Nifty was facing stiff resistance at the 4700 mark. Selling pressure was seen in technology, metal and auto stocks while realty, cement, oil marketing stocks were witnessing some buying interest. Stocks like Reliance Industries, SBI, ITC, L&T and BHEL were the major draggers to the bourses. On the global front, China's Shanghai plunged 6%. The Sensex was down 209.76 points or 1.32% at 15712.58, and the Nifty was down 51.95 points or 1.10% at 4680.40. About 1687 shares advanced, 1125 shares declined, and 373 shares were unchanged. Sanjay Dutt, Quantum Securities has advised investors to book profits at current levels. He said, 30-35% of Nifty components were surrounded by uncertainties. On higher side, he said, Nifty was unlikely to go beyond 4750-4800 in the near-term. However, on the downside, he added, Nifty could go to 4450 and not 4100 levels. “Nifty should cross 5000 by year-end,” Dutt said. Top losers on the Sensex were L&T at Rs 1,569.75 down 2.78%, Sterlite Ind at Rs 678 down 2.58%, Infosys at Rs 2,131.40 down 2.57%, TCS at Rs 526.60 down 2.57% and Hindalco at Rs 106.70 down 2.33%. Index heavyweight Reliance was trading at Rs 2,039.50 down 1.49% from its previous close of Rs 2,070.30. Tech major Infosys was trading at Rs 2,131.40 down 2.57% from its previous close of Rs 2,187.65.  Cigarette major ITC was trading at Rs 233.20 down 1.5% from its previous close of Rs 236.75. Nifty trades below 4700; RIL, Infy, TCS, L&T, Bharti drag At 10:55 hours IST, the Nifty was consistently trading below the 4700 mark on the back of relentless selling technology, telecom, capital goods, banking, metal and auto (four-wheeler) stocks. Reliance Industries was the main dragger on the Nifty, down 1.5%. More than 5% fall in Shanghai was the main reason behind this downtrend. Among the Asian markets, Hang Seng lost 1.8%. Jakarta, Straits Times and Kospi declined 1% each. However, Nikkei and Taiwan Weighted were flat in trade. The Nifty slipped 50 points to 4,681 and the Sensex declined 171 points to 15,750. The broader indices were flat; about 1,541 shares advanced while 1246 shares declined on the BSE. Nearly 398 shares were unchanged. India’s economy has seen a slightly better uptick in the first quarter of financial year 2008-09, signalling hopes that economic recovery is underway. The Q1 gross domestic product (GDP) growth stood at 6.1% versus growth of 5.8% in the previous quarter and 7.8% in Q1 of last year. Negative contributors - Reliance Industries, Infosys, ICICI Bank, L&T, Wipro, HDFC, TCS and Bharti Airtel were down 1-2.5%. Top gainers - DLF was at Rs 421.25, up 1.96%; Hero Honda was at Rs 1,519.40, up 1.02%; ONGC was at Rs 1,190.25, up 0.94%; Grasim was at Rs 2,673.50, up 0.58%; NTPC was at Rs 211.20, up 0.50%; Unitech was at Rs 103.45, up 4.39%; Cairn India was at Rs 269, up 3.42%; Siemens was at Rs 516.50, up 1.52% and ABB was at Rs 764, up 1.46%. In the midcap space, HOEC, Pidilite Industries, Nirma, Godrej Industries and Ackruti City were up 4-5% while Anant Raj Industries, Welspun Gujarat, Allcargo Global, GE Shipping and Indiabulls fell 2-4%. In the smallcap space, Century Plyboard, Empee Distiller, Dalmia Cement, Pratibha Industries and Uttam Galva surged 10-17%. However, Banco Products, WABCO-TVS, Vipul, JMD Telefilms and Infotech Enterprises lost 4-6%. Sensex slips on weak Asian cues; metals, IT, cap goods dip The Sensex opened sharply lower on the back of weak Asian cues, wherein Shanghai was down 5.4%. The Nifty slipped below the 4700 level. Metal, technology, capital goods and private banking stocks were witnessing selling pressure. At 9:57 am, the Nifty declined 58 points to 4,674 and the Sensex was down 183 points to 15,733. The CNX Midcap fell 42 points to 6,070 and the BSE Smallcap Index lost 26 points, to 6,935. About 223 shares advanced while 550 shares declined on the NSE. Metal stocks like Tata Steel, Nalco, Jindal Steel & Power, SAIL and Sterlite Industries were down over 2% each. In the technology space, TCS, Infosys, Wipro and HCL Tech were down 1.5-3%. Capital goods stocks like BHEL and L&T fell 1.5-2%. Axis Bank, ICICI Bank, HDFC Bank, HDFC and Reliance Industries were the other losers. However, Cairn was up 2%. Midcap space Orchid Chem, Suven Life, KPIT Cummins, Mahindra Satyam and Aban Offshore lost 1.5-5%. However, HOEC, Provogue, Shasun Chem and Maytas Infra were up 3-5%. Global cues: Asian markets were trading lower. Shanghai was down 5.37%. Hang Seng and Jakarta Composite fell 1.7% each. Straits Times and Kospi declined 1-1.3%. Taiwan Weighted fell 0.44% and Nikkei was down just 0.1%. The SGX Nifty fell 1.5%. The US stocks slipped from the day's high after US consumer sentiment hit 4-month low. The Dow Jones Industrial Average was down 36.5 points at 9,544, which was off 86 points from day's high of 9,630. The S&P 500 Index was down 2 points at 1,029, which was off 10 points from day's high of 1,039. The Nasdaq Composite ended flat at 2,029, which was off 30 points from day's high of 2,059. Commodities The Reuters CRB (Commodity Research Bureau) Index was up 0.5% at 257.8 on Friday. Crude gained for the third session and was up 5.5% in August. Gold rose 1.2% at $958.3/ounce and was trading at 3-week highs. Base metals gained for 7 straight weeks. Copper gained 4% last week and was trading at 11-month highs. Lead gained 13% last week and was trading at 13-month highs. Sugar gained 8% last week and was trading at 30-year high. Market cues: -FIIs net buy USD 274 million in cash on August 27 -MFs net buy Rs 16.7 crore in cash on August 27 -Total F&O Open Int up by Rs 6311 crore at Rs 68864 crore -FIIs net buy Rs 554 crore in cash on August 28 (prov) -DIIs net buy Rs 5.5 crore in cash on August 28 (prov) -FIIs net sell Rs 161 crore in F&O on August 28 F&O cues: -Total Futures Open Int up by Rs 2118 crore -Total Options Open Int up by Rs 4193 crore -Nifty up 0.9%, Futures Open Int up 6% -Nifty September Fut trading at 6-pt premium versus 10-pt premium -Stock futures Add 6.6 crore shares in Open Int -Nifty Open Int PCR up from 1.18 to 1.2 -Nifty Puts Add 44.8 lakh shares , Nity Calls Add 33 lakh shares -Nifty IVs at 31-34% levels -Nifty Sept 4600 Put Adds 7.7 lakh shares in Open Int -Nifty Sept 4800 Call Adds 6.2 lakh shares in Open Int -Nifty Sept 4700 Put Adds 5.8 lakh shares in Open Int -Nifty Sept 4500 Put Adds 5.7 lakh shares in Open Int -Nifty Sept 5000 Call Adds 5.5 lakh shares in Open Int -Nifty Sept 4900 Call Adds 4.4 lakh shares in Open Int -Note: Highest outstanding Nifty Open Int at 4500 Put and 4300 Put and 4900 Call