Sensex slumps 348 pts on US budget impasse, CAD | business | Hindustan Times
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Sensex slumps 348 pts on US budget impasse, CAD

business Updated: Oct 01, 2013 03:30 IST
HT Correspondent

The benchmark Sensex on Monday tumbled 348 points, or 1.8% to 19,380 — a new three-week low — amid expectations of weak April-June current account deficit (CAD) data and concerns about a likely US government shutdown over a stop-gap spending bill.

The broader NSE Nifty also fell 98 points, or 1.7%, to 5735.

High imports of gold and oil pushed CAD to 4.9% of GDP in April-June, data for which was released after market hours.

According to analysts, political instability and anticipation of further rate hikes by Reserve Bank of India also hit markets.

"The conviction of Lalu Yadav gave rise to a speculation that the government may be forced to test its majority in Parliament," said Deven Choksey, managing director, KR Securities.

“Amid global jitters, cement, steel and many other prices have gone up in India so chances of a further hike in rates are more than status quo,” said G Chokkalingam, managing director and chief investment officer at Centrum Wealth Management.

European, US and Asian markets all ended in the negative as political instability in Italy hit investor sentiments.

Among the 30 Sensex stocks, 25 ended in the red, led by Tata Steel (down 5.6%), BHEL (4.6%), ICICI Bank (4.2%), Coal India (3.9%) and L&T (3.5%). Hindustan Uniliver, up 1%, was the biggest gainer.

Among the sectoral indices, 12 ended in the red with capital goods (down 2.9%) topping the list.

While 877 scrips advanced, 1407 declined on the BSE.

Experts advice investors to go for selective buying.

“But one has to be regular in buying stocks and gradual in his approach,” Choksey said.

“Any weak opening will be an opportunity to buy with a medium-term view (two weeks) and with a price target of 6,000/6,050 from the Nifty standpoint,” said Shrikant Chouhan, head, technical research, Kotak Securities.