Markets end sharply lower; metal, realty, bank dip over 3 per cent

20 January 2009

The benchmark indices ended sharply lower on the back of weakness in Asian counterparts and a huge sell-off in shares of banking, metal, realty, oil & gas exploration, auto, telecom and capital goods companies.

The Sensex hit an intraday low of 9,033.55 before closing the day at 9,100.55, down 229.02 points or 2.45%. The Nifty slipped 1.74% or 49.60 points to settle at 2,796.60. It went close to 2,750 but did not break the level and touched a low of 2758.

The markets recovered a bit in the last one hour of trade mainly due to power stocks in the wake of Central Electricity Regulatory Commission (CERC) upping the Return on Equity (RoE) for power units to 15.5% versus 14%. Reacting to the news, Abhineet Anand of Antique Stock Broking said that the CERC guidelines could add Rs 250 crore of PAT to NTPC and boost Power Grid's PAT by 5-6%.

The BSE Power Index gained 1.44% at 1,803.09; Power Grid Corp surged 10.73%. Torrent Power, NTPC, CESC, Reliance Infrastructure, GVK Power, Areva T&D and Tata Power were up 1-6%.

This news was negated by the performance of all the other sectoral indices, which were sharply down. Leading counters in today's fall were Reliance Industries, Bharti Airtel, SBI, ICICI Bank, Reliance Communication, HDFC, SAIL, ONGC, HDFC Bank, L&T, DLF, Tata Steel and Sterlite Industries.

The Metal Index underperformed other indices: it was down 3.76% or 191.25 points to 4,896.79. Tata Steel, Sterlite Inds, SAIL and Hindalco were down 4-6.3%.