Nifty falls below 4400; RIL, ONGC disappoint

MUMBAI: Equity benchmarks witnessed one of the worst falls of 2009 on Wednesday, as investors booked profits and created fresh shorts in a market which looked tired after a splendid rally. Weak global markets also hurt sentiments badly, said dealers. All the sectoral indices ended in the red led by losses in metals, realty and capital goods stocks.

Indices opened lower in line with Asian markets and turned choppy with negative bias. The sell-off began in the afternoon with the negative opening of Europe. Sharp correction in index heavyweights like Reliance Industries, ONGC and Larsen&Toubro escalated the decline.

Reliance Industries has been on a decline since the Bombay High Court ruled against the company in gas distribution case it was fighting with Reliance Natural Resources.

“Markets are eventually going to come down and global scenario doesn’t look that positive. Not all commodities are going up. Only those in the F&O space have shot up. As long as housing market doesn’t do well in the US and prices keep falling, it will impact the global economy. To make matters worse, US jobless claims have risen though the intensity has reduced. This will result in lower consumption, putting pressure on other economies,” said a head of research from a local brokerage.

Bombay Stock Exchange’s Sensex ended at 14,522.84, down 435.07 points or 2.91 per cent. The index touched an intra-day low of 14,447.02 and high of 14,996.39.

National Stock Exchange’s Nifty closed at 4356.15, down 161.65 points or 3.58 per cent. The broader index hit a high of 4517.80 and low of 4332.80.

“We are set for a sharp fall as the ongoing rally is a liquidity driven rally and valuations are ahead of fundamentals. In the short term, domestic factors like rains and budget will drive the market and possibility of outbreak of swine flu in monsoon will be a potential threat. We should not be surprised if going forward the Sensex falls below 12000 mark,” the research head added.

Market breadth on BSE worsened with 1,990 declines against 686 advances. The BSE Midcap Index was down 3.92 per cent and BSE Smallcap Index slipped 3.74 per cent. Sector wise, BSE Realty tumbled 5.9 per cent, BSE Metal lost 5.63 per cent, BSE Oil & Gas shed 4.26 per cent.

None of the stocks from the 50-share index could brave the tide. Tata Steel (-7.48%), Tata Motors (-7.44%), Reliance Capital (-7.26%), Idea Cellular (-6.48%) and Suzlon Energy (-6.46%) were the worst hit. Index major like Reliance Industries tripped 4.29 per cent, ONGC declined 5.82 per cent and L&T fell 3.71 per cent. European markets continued to be under pressure. At 5 pm IST, FTSE 100 was down 0.72 per cent, CAC 40 fell 0.66 per cent and DAX declined 0.71 per cent. US stock futures indicated a positive opening on the Wall Street. Dow Jones futures was up 0.19 per cent, S&P 500 moved up 0.33 per cent and Nasdaq 100 gained 0.55 per cent.