Nifty ends below 3300; Oil, Cap Goods, IT stocks drag

16 October 2008

Markets ended sharply lower led by sell off in oil, capital goods, technology, auto and power stocks. They saw V-shape kind of recovery in the second half of the session after the free fall in the first half of the session. Recovery was led by short covering as well as some buying in the overbeaten down stocks. The Sensex and Nifty tested new-2008 lows in today's trade.

Benchmark indices had crashed severely in the first half of the session following bad global cues, as US and Asian markets witnessed free fall on recession concerns in the US. Markets have shrugged off RBI's move of 100 bps CRR cut on Wednesday late evening; RBI had already cut CRR by 150 bps last week. However, buying in the most beaten down stocks like Reliance Communication, HDFC, SBI, Bharti Airtel and short covering have helped markets in the second half of the session to recover from day's low, but sell off in heavyweights like Reliance Industries, L&T, Infosys, TCS, BHEL and ONGC had kept markets under pressure.

Select banking and financial stocks also recovered on hopes that further steps will be taken to increase liquidity in banking system.

The Sensex closed down by 227.63 points or 2.11% at 10,581.49, after seeing recovery of 563.69 points from day's low of 10,017.80. The Nifty has recovered 169.4 points from day's low of 3099.90 and ended with a loss of 69.1 points or 2.07% at 3269.30. Both frontline indices have swung 769 points and 233.95 points, respectively in today's session.

Among the frontliners, Hindalco, Tata Motors and NALCO fell 11-15%. TCS, Grasim, Reliance Industries, Suzlon Energy, Cairn India and Larsen & Toubro tumbled 8-9%.

However, Reliance Communication, DLF, HUL and Unitech have gained 7-10%.  HDFC and SBI rose over 3-5%.