Sensex logs worst drop in a month on profit-booking

Markets retreated for the second straight day from record highs on concerns that foreign funds may start trimming their exposure to emerging markets if the US Federal Reserve hikes interest rates sooner-than-expected. Further, the weak rupee also weighed on market sentiment.

The 30-share Sensex ended down 208 points at 27,057 and the 50-share Nifty closed 59 points lower at 8,094.

In broader markets, the BSE Mid-cap index ended flat while Small-cap index closed 0.6% higher.

Market breadth ended strong with 1,739 advances and 1,278 declines on the BSE.

Asian Markets:

Asian shares ended lower barring Japan’s Nikkei on concerns the the Federal Reserve would raise interest rates earlier than expected. Nikkei ended up 0.2% while Hang Seng lost 2%, Shanghai Composite finished 0.4% lower and Straits Times ended the session with marginal losses.

Rupee:

The Indian rupee was trading lower at Rs 60.9 against the US dollar compared to the previous close of Rs 60.60.

The rupee weakened to its lowest in nearly a month on Wednesday tracking falls in emerging markets due to worries the US Federal Reserve would raise interest rates earlier than expected, although exporters' dollar sales capped broader falls.

Meanwhile, overseas investors bought Indian shares worth 4.79 billion rupees ($79 million) on Tuesday, exchange data shows.

Sectors & Stocks:

On the sectoral front, Consumer Durables was the biggest loser down 1.6% followed by FMCG, Capital Goods, IT and Oil and Gas indices which lost between 1-1.5%. Bankex ended marginally lower.

However, Realty and Power indices ended in the positive territory up between 0.1-0.7%.

Shares of IT majors ended down on profit taking while Tuesday's losses in technology shares on the Nasdaq also dampened sentiment.

IT major Infosys lost 1.8%. Following the tandem TCS and Wipro lost between 0.7-1%.

Oil and Gas stocks which gained in the recent trading sessions on decline in crude oil prices ended lower today.

RIL was down 1.7%, ONGC dipped over 1% and GAIL shed 0.5%.

Cigarette maker ITC lost nearly 2%

on media reports that the government may ban the sale of loose cigarettes among other measures. On similar lines, shares of other cigarette companies including Godfrey Phillips India and VST Industries also ended lower.

HUL ended with marginal losses.

Among the Auto shares, Hero Motocorp, M&M and Tata Motors finished lower between 0.5-2% whereas Maruti Suzuki inched down.

Shares of SUV maker M&M were under pressure today after Kotak Institutional Equities downgraded the stock.

In the financial segment, SBI, HDFC twins and Axis Bank edged lower between 0.3-2%. However, ICICI Bank gained 1% after the board announced stock split of equity share of face value Rs 10 each into five equity shares of face value Rs 2 each.

Shares of Coal India ended lower by 2%. Centre wants Coal India to take over active mines if all blocks are cancelled or firms be allowed to continue production until these are re-auctioned.

In the Capital Goods space, L&T and BHEL dipped over 1%.

On the flip side, power and metal shares which were trading lower in the previous trading session have rebounded today.

The Supreme Court on Tuesday reserved its final order on whether 218 illegal coal block allocations should be de allocated. Tata Power, Sesa Sterlite and Tata Steel gained between 0.5-2% while Hindalco ended with marginal gains.

Bharti Airtel, Baja Auto and Cipla were some of the prominent names in green.

Among other shares, BL Kashyap and Sons ended firm for second day in a row, up 20% at Rs 12.96 on BSE after HDFC Mutual Fund bought 1.42 million shares at Rs 9.20 per share in a bulk deal on Tuesday, 9 September 2014.

Shares of Lanco Infratech closed higher by 8% at Rs 8.76 on reports that the company plans to sell some of its power assets with a view to reduce its debt burden.

Shares of companies engaged in shipbuilding business rallied by up to 13% on reports that the government is said to be looking at several options to boost ship building in the country.

ABG Shipyard rallied 13% to Rs 257 on back of heavy volumes and Bharati Shipyard was locked in upper circuit of 10% at Rs 39 on NSE with no sellers on the counter.