ICICI Bank, L&T drag Sensex to 1-month low | business | Hindustan Times
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ICICI Bank, L&T drag Sensex to 1-month low

business Updated: Sep 05, 2012 18:46 IST

The Sensex on Wednesday shed 128 points to close at one-month low levels on selling in ICICI Bank, L&T and RIL, amid a weak trend in global markets ahead of a crucial ECB meeting on Thursday.

The BSE benchmark index, which had gained 56 points on Tuesday, opened weak and traded in negative terrain for most of the session as metal, capital goods and bank shares were under pressure. The rupee, which slipped to near 56-levels against the US dollar, also made investors cautious.

A nearly 3.6% drop in ICICI Bank shares, and L&T, which lost nearly 3% weighed down the 30-share Sensex. RIL, which shed one%, also soured the sentiment.

The Sensex ended 127.53 points, or 0.73%, down at 17,313.34, its lowest closing since August 3.

Likewise, the 50-share National Stock Exchange index fell by 48.30 points, or 0.92% to close at 5,225.70.

"Metal shares declined following weakening in global commodity prices. Jindal Steel & Power and Hindalco hit 52-week lows. Selling pressure continued in capital goods on concerns over economic slowdown and consequent delay in execution of major power projects," said Nidhi Saraswat, senior research analyst, Bonanza Portfolio.

Traders said investors mostly ignored an improvement in country's services sector growth with HSBC's Services Purchasing Managers Index in August inching upwards to 55.

The coal block allocation issue cast its shadow on Parliament for the eleventh day on Wednesday paralysing proceedings with BJP remaining unrelenting on the demand for resignation of Prime Minister Manmohan Singh.

Brokers said a weak trend in the Asian region and lower opening in Europe ahead of European Central Bank's meeting on Thursday, further influenced the domestic sentiment.

Among sectoral indices, the BSE-Metal suffered the most falling by 2.64%.

The BSE-Capital Goods sector index logged the second worst performance by losing 2.54%.

The BSE-Bankex declined 1.82% on worries over bad loans and growth prospects amid reports that Morgan Stanley downgraded rating on Axis Bank to 'underweight from 'equal weight'.

Asian stocks ended weak today, as US manufacturing contracted for a third month and Australia's economy grew at a slower pace.

Key benchmark indices in China, Hong Kong, Japan, Singapore, South Korea and Taiwan dropped between 0.29-1.74%.

However, European markets were trading slightly better in their afternoon deals a day ahead of the ECB policy meeting on interest rates. The CAC was up by 0.30%, the DAX by 0.69% while the FTSE was by a mere 0.07%.

Kishor P Ostwal, CMD, CNI Research Ltd. said,"Markets are waiting S&P's India review. The review will be closely watched."

From the 30-share Sensex pack, 21 stocks finished with losses. Major losers were BHEL (4.98%), Jindal Steel (4.78%), ICICI Bank (3.56%), Tata Steel (3.42%), Sterlite Ind (3.17%), L&T (2.89%), Hindalco (2.65%), Tata Motors (2.60%), SBI (2.17%), Sun Pharma (1.80%), Cipla (1.50%), Tata Power (1.35%), NTPC (1.12%) and RIL (0.96%).

However, Bharti Airtel firmed up by 3.28%, followed by Hindustan Unilever (1.84%), TCS (1.41%) and ITC (0.66%).

Talking about 50-share Nifty's outlook, Shubham Agarwal, associate VP and senior technical equities analyst, Motilal Oswal Securities said: "A follow-up selling below 5215 on Nifty can lead to a correction of another 45 points for the thrust of 5170."

The total market breadth turned negative as 1,558 stocks ended lower while 1,235 scrips finished higher.

The total turnover firmed up to Rs. 1,977.79 crore from Rs. 1,634.59 crore on Tuesday.

FIIs turned net buyers after straight two days of selling and picked up shares worth net Rs. 304.40 crore on Tuesday as per the provisional data from the stock exchanges.