Sensex falls most in over 3 weeks, down 414pts on global sell-off

The markets slumped in late trades, amid weak global cues, on aggressive selling by institutional investors on concerns that robust US jobs data due later on Friday may give the US Federal Reserve much needed comfort to taper its bond buying program and end its easy money policy stance by raising rates sooner-than-expected. Further, investors also turned cautious ahead of RBI monetary policy meet next week.

The 30-share Sensex ended down 414 points at 25,481 and the 50-share Nifty slipped 119 points at 7,603.

Indian stock markets have purely driven by foreign fund inflows following the US Fed's bond buying program. Foreign funds have pumped over $5 billion in Indian equities during July on the back of the new government's reforms agenda. Total inflows since January are over $25 billion.

In the broader market, the BSE Mid-cap index lost 0.8% and the BSE Small-cap index gave off 0.9%.

Across the Globe

Asian shares were mostly under water on Friday after a sudden slump on Wall Street spilled over globally, though a surprisingly strong pick up in manufacturing helped Chinese markets hold at seven-month highs.

In a promising omen for world growth China's official measure of industrial activity (PMI) rose to 51.7 in July from 51.0 in June, beating forecasts of 51.4 and the highest in 27 months.

The Nikkei ended down 0.6% at 15,523.11. The Shanghai Composite was down 0.7%, Hang Seng slipped 0.9% and Straits Times was trading nearly 1% lower.

European shares were also trading with marginal losses in early trades with CAC-40, DAX and FTSE down 0.2-0.3% each.

Meanwhile, the Indian rupee was trading sharply lower at Rs 61.1 compared to its its previous close of Rs 60.55 after the dollar strengthened following upbeat US GDP data.

Further, weakness in domestic equities also weighed on sentiment.

Factory activity expanded at its fastest pace in 17 months in July on increased orders, showed a widely-tracked HSBC purchasing managers' index (PMI).

However, this also jacked up prices, which might cause the RBI to hold the policy rate in its review next week.

Sectors & Stocks

On the sectoral front, all indices lost sheen with BSE Consumer Durables being the biggest loser down 2.7%. All the other indices lost between 1-2% on the BSE.

NTPC, the largest thermal power producer in the country, registered a decline of 13 per cent in profit, owing to new tariff regulation and lost 3%. Following the tandem, Tata Power dipped 3%.

The metal pack witnessed heavy selling during the late trades. Hindalco, Sesa Sterlite and Coal India and Tata Steel lost between 1-.4.5%.

The banking shares barring ICICI Bank ended in the negative territory. HDFC twins and Axis Bank shed between 1-3%.

However, SBI ended flat with a negative bias. ICICI Bank edged up marginally after it reported a 17 per cent growth in its standalone net profit to Rs 2,655 crore in the April-June quarter, compared with Rs 2,274 crore in the year-ago quarter, on the back of both higher core and fee income.

Oil and Gas majors ONGC and RIL dipped 2% and 2.7% respectively on concerns that its margins on retail fuels would come under pressure after state-owned oil PSUs lowered petrol prices. GAIL lost 3%.

Technology shares, TCS, Wipro and Infosys lost between 1-2.5%.

The healthcare index lost 1.6%. Dr Reddy’s lab, Cipla and Sun Pharma ended down between 1.5-3%.

L&T continued to witness profit taking post its first quarter earnings and was down 2%. BHEL contributed 2% to the decline.

Tobacco-to-hospitality giant ITC shed 2%. However, its peer HUL ended up 1.5%.

On the flip side, Bharti Airtel, Idea Cellular and Reliance Communications (RCom) gained on reports that mobile tariffs could rise between 8–9% going ahead. Bharti Airtel ended up 1%.

Maruti Suzuki surged 2.5% after the company reported 21.7% increase in its total sales for July at 1,01,380 units as against 83,299 units in the same month last year.

The company said its domestic sales rose 19.9% during the month to 90,093 units as against 75,145 units in July 2013.

In contrast, M&M and Tata Motors lost 2.4% and 1.8%, respectively.

Among other shares, Pantaloons Fashion & Retail lost 11% at Rs 112 on the Bombay Stock Exchange (BSE), after the company reported 35% fall in its standalone net profit for the quarter ended June 2014.

Mahindra & Mahindra Financial Services gained 3% at Rs 243 after a block deal at Rs 238.30 per share on the Bombay Stock Exchange (BSE).

Greaves Cotton lost 3.5% to Rs 111 on the BSE after India’s leading engineering company posted 9.51% decline in net profit at Rs 28.74 crore for the quarter ended June 30, 2014 compared with Rs 31.76 crore in the corresponding quarter previous year.

Market breadth ended weak with 1,759 losers and 1,119 gainers on the BSE.