Grim firm tidings take toll on stocks

The stock markets hit a two-month low on Tuesday as the 30-share BSE sensex plummeted nearly 500 points on weak global cues and poor corporate quarterly earnings over the weekend.

The sensex, which fell 3.1 per cent, or 491.34 points, to close at 15404.94, suffered losses for the sixth day running. The Nifty closed below the 4600-mark for the first time since September 3 at 4563.90, a fall of 3.14 per cent.

The realty and metal packs were the worst hit, while index heavyweight Reliance Industries was mostly responsible for pulling down the sensex. The realty index was down 9.76 per cent, while the metals index fell 5.95 per cent. The RIL scrip fell 5.73 per cent to Rs 1,820.65 on Tuesday.

Analysts said the stock fell close to the resumption of court hearings on RIL’s tussle with Reliance Natural Resources. The pressure on RIL’s refining margins also affected sentiments.

Heavy selling began in afternoon trade and the market went down in huge volumes. “Around two ’clock there was a large amount of selling and it is difficult to ascertain what exactly triggered it. The European markets were also weak. We sensed a certain amount of fear creeping in,” said Arun Kejriwal of Kris Securities.

Gaurav Dua of Sharekhan blamed the widespread selling on weak global cues and poor corporate earnings of companies such as Suzlon Energy, Reliance Communications and Reliance Capital.

Others are more bullish. “This fall is purely on the back of a drop in the European market and in that light the fall is being exaggerated,” said Motilal Oswal’s Manish Sonthalia.

Shares of Balrampur Chini Mills today fell 10 per cent on the BSE amid reports that the stake sale by its promoters to Bajaj Hindusthan have failed to materialise.

The RBI’s hawkish comments and talks of monetary tightening added to the negative sentiment, a trader from a leading Mumbai-based brokerage said.

Analysts and traders are divided on whether the markets will correct going forward, “We expected some kind of correction sooner,” said Dua. The global markets have been weak as investors worry about the early removal of government stimulus, reported an agency.

On Tuesday, Indian Bulls was the top loser, recording a decline of 18.87 per cent, while India Bulls Real Estate fell by 16.15 per cent. Hindalco did not fare well either after its quarterly results and fell by 10.50 per cent to Rs 109.15. Suzlon Energy dropped 12.93 per cent to Rs 58.25, while JSW Steel fell 9.92 per cent to Rs 680.65.

Of the 2761 shares listed on the BSE, there were 2171 declines during the day compared with 534 advances.