Sensex ends below 20,000; IT, realty, infra dip
19 Oct 2010
Equity benchmarks could not able to continue yesterday's late trade recovery. The sell-off in technology, realty, capital goods, power, oil & gas exploration, select financial and metal companies' shares pulled the Sensex below 20,000 mark in last one hour of trade, for the first time since September 29.
The market started the session on a strong note but could not sustain that for long and immediately turned volatile, which continued till the afternoon trade. Suddenly in last one hour of trade, both benchmarks slipped sharply, might be due to profit booking. Coal India could still be one reason, which will open till October 21; the government aims to raise over Rs 15,000 crore via issue.
The Nifty held above the 6000-mark, a level that Hemen Kapadia of chartpundit.com says, is strong support area for it. "We have probably entered a 4 to 6 week correction. We saw the Nifty move from roughly 5340 to 6248 in seven weeks. First time we have broken the weekly bottom so I think we slipped into a much needed overdue correction. It's healthy but I don't think we are going make a new high in the current month. 6000 has been a source of support; maybe not today, tomorrow, day after that breaks I think we could gravitate finely towards 5800. So I would be slightly cautious for the next 4 weeks or so."
Robert Parker, Senior Advisor of Credit Suisse said that they are sceptical of investing at current levels in India. According to him, we are likely to see rotation in capital within EMs. Parker said that margin of outperformance of India compared to China is down to 24%. However, he still feels that India and other EMs will end FY11 on a higher note.
However, auto and cement companies' shares along with GAIL, Cipla, SAIL, ICICI Bank, BPCL and Dr Reddys Labs were on buyers' radar, which capped the losses to some extent. ICICI Bank rallied more than 3% during the day but the sell-off trimmed its gains at end.
The 30-share BSE Sensex closed at 19,983.13, down 185.76 points or 0.92% and the 50-share NSE Nifty fell 48.65 points or 0.80% to settle at 6,027.30. The Nifty October futures ended at a discount after long time.
