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The local markets are expected to react to global triggers until the government announces the Union Budget for the fiscal year 2016/17.
Markets fell for the second straight session after Japanese equities posted its biggest daily drop in nearly three years amid strengthening yen.
Meanwhile, weakness in IT shares after Cognizant’s weak guidance for the three months ending March 2016 further dented the sentiments.
The S&P BSE Sensex closed 266 points lower at 24,021 and the Nifty50 slumped 89 points to end at 7,298 In the broader market, BSE Midcap and Smallcap indices closed lower between 1.2%-2%.
“The market today opened weak reacting to the overnight fall in the international markets. The European markets in particular were deep in the red on fears of renewed slowdown. Crude oil tumbled after OPEC could not arrive at consensus to conduct emergency meeting for curtailing production to arrest fall in the oil price. All out pessimism lead our markets to finish lower," said Jimeet Modi, CEO, SAMCO Securities.
"IT stocks too came under heavy selling pressure taking clues from the weak guidance given by Cognizant and renewed selling pressure in NASDAQ. The Technology index made a 52 week low after many years of relentless rise. All these fear factors lead to our markets falling by 86 points on Nifty50,” he added.
Yesterday, India reported GDP figures which suggested that India’s economy grew by 7.3% year over year in the fourth quarter, and prior quarters’ growth was revised higher.
GLOBAL MARKET
Japan's benchmark index Nikkei posted its biggest daily drop in nearly three years with banks taking the brunt of the sell-off, while a stronger yen dragged down stocks across the board.
The Nikkei ended 5.4% lower at 16,085.44 points, its lowest closing level since Jan 21. Also, European equities are extending recent losses mirroring a sharp decline in the Japanese stocks. CAC 40, FTSE and DAX 100 are trading down between 0.1%-5%.
TECHNOLOGY PACK
Shares of information technology companies cracked up to 4% after Cognizant Technology Solutions Corp. said that it expected little or no growth in the three months to March.
Tata Consultancy Services (TCS), Infosys, HCL Technologies, Tech Mahindra and Mind Tree lost up to 4%.
KEY STOCKS AND RESULT REACTION
Maruti Suzuki India fell nearly 2% after its total production fell 4.6% to 1.15 lakh units in January 2016 over January 2015.
Meanwhile, Lupin closed over 4.5% higher extending its past two day’s gain after the drug maker reported better-than-expected net profit of Rs 601 crore for the third quarter ended December 2015 (Q3FY16).
Sun Pharma added 2%. However, Dr. Reddy’s closed 3% lower ahead of its December quarter results.
Another stock that gained in the subdued market was GAIL closing nearly 2% higher after posting a net profit of Rs 664 crore against analyst expectations of Rs 456 crore.
Bharat Forge closed flat after its net profit for the December quarter fell 15% from a year ago due to lower net sales.
Punjab National Bank fell nearly 7% as net profit fell sharply by 93% to Rs 51 crore in the third quarter of this financial year, from Rs774 crore in the year ago period on account of fresh slippages arising from the steel sector besides higher provisioning requirement as part of RBI norms.
"While results were expected to be bad, the quantum of rise in gross NPAs has surprised us. The Gross NPAs are up 37.7% q-o-q and now stand at 8.47% versus 6.36% in Q2FY16. This 210 bps rise in GNPAs doesn’t seem to be the end of the pain, as the bank is expected to report similar set of rise in NPA levels during Q4FY16 as well," said Vaibhav Agrawal, vice-president for banking research at Angel Broking in a note.
Motherson Sumi cracked 11% after the company missed its net profit estimates. Net profit rose 21% to Rs 307 crore in the quarter ended December 2015 as against Rs 254 crore during the previous quarter ended December 2014.
Among the prominent losers in the Sensex pack includes Coal India, Tata Motors, SBI and Cipla ending lower between 2%-5%.
