A flash 900-point crash in NSE Nifty index for a brief period this morning and concerns over the fate of big-ticket reforms like raising the FDI cap in insurance, cut short a four-day rally in stock markets with BSE Sensex falling 120 points to end below 19,000 level today.
After gaining around 480 points in past four sessions, the BSE benchmark index opened higher at 19,115.89 after the government yesterday unleashed another round of reforms.
However, the Sensex soon dropped over 200 points mirroring a 900-point fall in NSE Nifty due to a technical glitch caused by sell orders worth Rs 650 crore executed by broker Emkay Global Financial Services. This halted trade in cash market for 15 minutes, hitting investor sentiments.
Besides, market participants weighed up the fate of the big-ticket economic reforms announced yesterday as some legislations are likely to face stiff opposition in Parliament when they come up for passage, brokers said.
The Sensex closed 119.69 points down, or 0.63 per cent, at 18,938.46. The Nifty closed at 5,746.95, down 40.65 points, or 0.70 per cent.
"A healthy up move, on back of fresh reforms, was expected today. However, the initial euphoria evaporated due to confusion from erroneous trades on NSE in morning," said Milan Bavishi, Head Research, Inventure Growth & Securities.
Importantly, some bills need to be approved by Parliament before becoming a reality and notably, the main opposition party, BJP, seems opposed to raising the FDI limits, said brokerage Edelweiss in a report.
HDFC, which lost 4.55 per cent, was the worst hit among 30 Sensex stocks amid reports that global fund house Carlyle has sold a big chunk of its 3.7 per cent stake today.
Infosys, ICICI Bank, HDFC Bank, TCS, Sun Pharma and Bharti Airtel also suffered losses while Tata Motors, HUL, RIL, L&T and ONGC rose, cushioning the fall to some extent.
Meanwhile, the rupee traded weaker at 51.81 to the dollar, from its last close of 51.74.
Barring China market which was closed today, other Asian stocks ended firm today between 0.11-0.69 per cent ahead of jobs data in the US later in the day.
"The monthly jobs data for September is expected today in the US, which will be closely watched," said Sanjeev Zarbade, Vice President (PCG), Kotak Securities.
European markets were also quoting higher in the afternoon deals after better-than-expected US economic data released yesterday.
The CAC (France) was up by 0.82 per cent, the DAX (Germany) by 0.56 per cent and the FTSE (UK) by 0.39 per cent.
Back home, among the Sensex pack 17 stocks finished with losses while 13 stocks ended with gains.
Besides HDFC, major losers from the index were Sun Pharma (2.48 pc), Wipro (2.41 pc), Infosys (1.84 pc), ICICI Bank 1.57 pc), Dr Reddy's Lab (1.44 pc), HDFC Bank (1.43 pc), Bharti Airtel (1.37 pc), Hero Motocorp (1.11 pc) and BHEL (1.09 pc).
However, Tata Motors fell by 2.24 per cent, followed by HUL (1.60 pc), M&M (1.16 pc), ONGC (1.09 pc) and Hindalco (0.89 pc).
"The undertone was cautious today, as markets had already reacted to the news of impending Cabinet nod for FDI in pension sector and increase in FDI limit in insurance.
"However, the undercurrent for the Indian equity remains positive in the wake of the Government's new-found zeal to introduce long-pending economic reforms," said Amar Ambani, Head of Research, IIFL.
Among indices, the BSE-Teck fell by 1.65 per cent, followed by the BSE-IT (1.62 pc), the BSE-HC (1.40 pc) and the Bankex (1.09 pc).
The market breadth turned negative as 1,786 counters ended with losses while 1,076 finished with gains. Total turnover rose to Rs 5,444.39 crore from Rs 2,958.36 crore yesterday.
Meanwhile, FIIs pumped in Rs 944.43 crore yesterday as per provisional data with stock exchanges.