Markets slump as banks, metal shares drag

Markets closed in red for third consecutive day with the benchmark indices losing 0.7% each in today’s trade. Weakness in banks, metals and FMCG heavyweights weighed on the indices.

At close, the Sensex was down 165 points at 22,466 and the Nifty slipped 46 points to end the day at 6,715.

Broader markets which were resilient in the first half, turned weak in closing deals. The midcap index gave off 0.4% while the smallcap index closed flat with a negative bias.

After opening marginally in green, markets slipped and remained in the negative territory.

Even though benchmark indices made a brief attempt to regain some of its lost ground in early noon trades, profit booking in heavyweights dragged the markets to day lows in the closing hour.

Market participants were caution as foreign Institutional Investors trimmed their purchases in Indian equities in the past two sessions with net purchases of Rs 295 crore on Friday and just Rs 77 crore on Monday, as per the provisional data released by the stock exchanges.

Further, the India Meteorological Department on Thursday announced that the country will likely get below-normal levels of monsoon rain this year.

Investors also maintained caution ahead of the announcement of Federal Reserve's monetary policy review tomorrow, 30 April 2014.

Adds Kunal Bothra, Technical Analyst, LKP Securities, “ If on closing basis, markets close below 6,750 which is a critical short term support, then I think, there could be a chance that Nifty may correct till 6675-6650 levels.”

Rupee

The rupee fell to a high of 60.42/43, compared with its close of 60.645 on Monday, reversing earlier losses due to large dollar sales from corporates, including some exporters.

Firmer Asian currencies also weighed on the dollar, although investors are largely cautious ahead of the Fed's policy meeting ending on Wednesday.

Global Markets

Asian share markets put in an indecisive performance on Tuesday as caution ahead of some major events this week overshadowed a late rally on Wall Street.

Activity in Asia had been very much muted with MSCI's broadest index of Asia-Pacific shares outside Japan drifting off 0.25%.

Hang Seng, Taiwan Weighted and Shanghai Composite up 0.7-1.5% were the only indices to close in green in Asia.

European stocks rose on Tuesday, as optimism surrounding corporate earnings and merger moves eclipsed the crisis in Ukraine, while rising euro zone money market rates and strong German consumer confidence supported the euro.

Germany's DAX was up almost 1% while Britain's FTSE 100 index was up 0.5% and France's CAC 40 up 0.2%.

Sectors & Stocks

Consumer Durables index up 0.2% was the only index to close in green.

BSE Metal index slumped by nearly 3% followed by counters like FMCG, Banks and Power indices down 1% each.

Sun Pharma, Coal India, HDFC and TCS up 0.1-0.6% were the only gainers among Sensex-30.

Tata Steel, HUL, Hindalco, Tata Power, SBI and Bajaj Auto down 2-5% were the major losers in today's trade.

Maruti Suzuki, Tata Motors, Sesa Sterlite, Cipla, HDFC Bank, Hero MotoCorp and ICICI Bank were all down 1-1.8%.

The market breadth was negative on BSE. 1,509 stocks declined while 1,280 stocks advanced.

Smart Moves

Railway stocks such as Titagarh Wagons, Kalindee Rail Nirman and Kernex Microsystems plunged 10% due to profit-booking on the Bombay Stock Exchange.

Granules India surged 6% to Rs 365, extending its over 10% rally in the past two days on the BSE, after reporting a strong 90% year-on-year (yoy) jump in consolidated net profit at Rs 23.63 crore for the quarter ended March 31, 2014 (Q4FY14).

The pharmaceutical company had posted a profit of Rs 12.41 crore in the year-ago quarter.

Hexaware Technologies declined nearly 11% to Rs 153 after reporting 32% sequential drop in consolidated net profit at Rs 70 crore for the quarter ended March 31, 2014, due to decline in revenues from some of its top customers.

Wockhardt surged 12% to Rs 808, extending its previous day’s 12% rally, after the company said on Monday the drug regulator of Himachal Pradesh has revoked a suspension it imposed on the manufacture and sale of a combination drug for pain treatment.

Tata Sponge Iron was locked in upper circuit at Rs 574 after reporting an over four-fold jump in consolidated net profit at Rs 40.50 crore for the quarter ended March 31, 2014, on the back of strong operational performance.

The Tata group company had posted a profit of Rs 9.29 crore in year ago quarter.

Fulford (India) was locked in upper circuit for a second consecutive day up 20% at Rs 988 on the BSE after its promoter Dashtag propose a voluntary delisting of the company’s equity shares from the Indian sock exchange.

IRB Infrastructure gained nearly 3% to Rs 120 on the BSE after the company said it has been awarded an order worth around Rs 3,200 crore from National Highways Authority of India.