A fall in revenues reported by construction giant Larsen & Toubro rattled the stock markets on Thursday. With no broad-based support from domestic or global triggers, the benchmark Sensex of the Bombay Stock Exchange plunged by 423 points, or 2.4 per cent, arresting a bullish mood in the bourses.
Results from state-controlled BHEL Ltd also seemed to hurt the market sentiments, leaving analysts wondering if blue-chips are priced too high.
The BSE capital goods index led the fall with a 5.2 per cent plunge during the day, as the Sensex and Nifty slipped by 2.4 per cent each to close the day at 17,051 and 5,094 respectively.
“L&T came out with a below-expectation result, and since the markets are trading into an expensive zone any result that disappoints will have an adverse impact,” said Aseem Dhru, chief executive officer, HDFC Securities. “There is a general caution on the subsequent results.”
L&T, with a 6.9 per cent fall, emerged the biggest loser in the list of 30 companies that form Sensex. The other major losers were Tata Power and BHEL with 4.5 per cent and 4.1 per cent falls respectively.
Experts suggest that the market is trading in a cautious zone as there are few positives.
“There are no big surprises on the global front, inflation is a cause of worry and the foreign institutional investors have also pulled out money from the market,” said Alex Mathews, head of research, Geojit Securities.
Among the Asian markets too, the Sensex was the biggest loser, followed by Hang Seng, which lost 2 per cent and the Strait Times of Singapore that fell by 1.5 per cent.
Back in India, only Mahindra & Mahindra managed to close flat in the Sensex 30 companies as all other witnessed corrections on Thursday.