Nifty falls on profit booking; realty, metals tank

MUMBAI: The party on Dalal Street came to an end on Monday as indices ended sharply lower after investors offloaded positions following a poor show by global markets.

The correction was widely anticipated after a recent surge in scrips across the board, said dealers.

Market turned weak soon after opening of trade and drifted lower as the session progressed.

Negative opening of European markets and weak US stock futures saw bears back in action.

The worst hit were the realty, metals and banking stocks which were in over-bought territory.

“Stocks had run up very fast ahead of their fundamentals. Hence, there will be a temporary halt in momentum and market (Nifty) will consolidate between 4200-4500,” said Madhumita Ghosh, head of research, Unicon Financial Intermediaries.

“Market will remain rangebound for a month and then we will see stock specific action once the Union Budget and June quarter results are announced.

These will give clear direction as to where the markets are headed,” Ghosh added.

Bombay Stock Exchange’s Sen*** closed at 14665.92, down 437.63 points or 2.90 per cent. The 30-share index touched an intra-day low of 14604.23 and high of 15200.82.

National Stock Exchange’s Nifty ended at 4429.90, down 157 points or 3.42 per cent. The broader index hit a low of 4404.65 and high of 4611.40.

“Nifty closed below intraday support of 4520, which is a bearish sign. Next support for Nifty is 4360-4350. If that is broken, then the index is headed for 4200 levels.

If there is a gap-up opening, traders can short Nifty with stoploss of 4520 and investors should stay away at this juncture and look at entering the market around 4100-4200 levels,” said Michael Pillai, technical analyst, Nirmal Bang Research.

BSE Midcap Index was down 5.45 per cent and BSE Smallcap Index declined 5.80 per cent. According to the BSE website, 124 scrips in the BSE Smallcap Index were locked at the lower circuit.

Amongst the sectoral indices, BSE Realty Index tanked 10.54 per cent, BSE Metal Index fell 6.51 per cent and BSE Bankex was down 4.42 per cent. BSE IT Index was up 1.57 per cent.

Unitech (-14.16%), DLF (-10.53%), Tata Steel (-10.23%), SAIL (-9.17%) and Reliance Communications (-9%) were the major Nifty losers. Wipro (3.11%), TCS (2.88%), Infosys Technologies (2.54%), Hero Honda (0.56%) and Tata Power (0.20%) were amongst the index gainers.

Market breadth was negative on the BSE with 2,246 declines and 582 advances.Advertisement

Gwalior Chemical Industries was in action after the company entered into an agreement to sell its chemicals business to Lanxess for an estimated Rs 380 crore.

Jaiprakash Associates posted a net profit of Rs 8970.10 million for the year ended March 31, 2009 whereas the same was Rs 6096.70 million for the year ended March 31, 2008. Total Income for the year ended March 31, 2009 was Rs 61479.30 million compared to Rs 42612.00 million same period last year. The scrip ended over 10 per cent lower.

Dish TV plunged over 16 per cent lower after the promoters sold 5.8 per cent stake in the company to fund their share of the rights issue.

European markets were in the red led by fall in over-heated banks and commodities space. Wall Street is also likely to open lower indicate stock futures.

At 5pm IST, Dow Jones stock futures were down 0.76 per cent, S&P 500 futures fell 0.80 per cent and Nasdaq 100 futures slipped 0.90 per cent.