Nifty sees biggest crash in 7 months, melts 91 points at close

Benchmark indices logged their biggest single-day loss in seven months Thursday, as the slide in European shares unnerved investors in India as well. Metal, banking, capital goods and realty shares bore the brunt of the sell-off as the Sensex crashed 317.39 points to close at 19,325.36. The Nifty shed 90.80 points to close at 5,852.25.

Brokers said unwinding of derivatives trades could have been one of the major reasons for the collapse. It is not clear if foreign institutional investors were sellers in a big way, but many players feel that could well have been the case.

''In our view, FII flows are the biggest risk to the market. They have crossed 2 percent of market cap on a 12-month trailing basis, which has historically been a warning sign for prospective equity returns,'' said a Morgan Stanley note to clients this morning, adding, ''The trigger for a reversal of flows comes from a global risk off which is hard to time.''

So far in 2013 alone, FIIs have net bought around Rs 43,000 crore worth of shares, coming on the heels of Rs 1.3 lakh crore of net purchases in 2012.

Unlike in the previous weeks when investors were mostly dumping midcap and small cap shares, Thursday's crash was broad-based.

''I don't think any kind of negative perception has started building up. This seems to be the pure global effect and may be because of the FII risk-off (outlook),'' investment expert SP Tulsian said in an interview to CNBC-TV18.

Market expectations are low ahead of the Union Budget next Thursday, as the widely-held view is that Finance Minister Chidambaram is likely to focus on fiscal consolidation through expenditure cuts. While this would help avert a sovereign rating downgrade, it would also delay economic recovery, say analysts.

ABB, JSW Steel, JSW Energy, Pantaloon Retail, Shriram Transport and Sun TV were among the big losers of the day, shedding between 5-8 percent.

Shares from the FMCG, pharma and IT shares fared slightly better as investors sought refuge in defensive sectors.

Videocon Industries was the top gainer, rising 5.2 percent. Glaxosmithkline Consumer, Godrej Consumer, Glenmark Pharma and Hexware rose between 0.5-2.0 percent.

''There are low expectations on the Budget and in the absence of that investors are again getting focused on what is happening in the global markets. The Fed minutes which came out spooked Asia and that has followed on through to our markets and to Europe as well,'' Dipan Mehta, member, BSE & NSE, said in an interview to CNBC-TV18.

''Now, we are seeing a lot of global commentators being worried about the turn in the interest rate cycle globally which means that if the Federal Reserve is going to follow a slightly tighter monetary policy then that is going to have an impact on all risky assets and commodities and emerging markets are amongst the risky assets,'' he said.

The BSE Sensex is down over 1.5 percent at 19,356 and the 50-share Nifty slips 1.57 percent at 5857, heading towards their biggest single day fall since October 8, 2012.

The fall was on the back of weak Asian cues on talk of a hedge fund liquidating big global positions in commodities and worries that the US Federal Reserve could wind down its bond-buying programme.

ICICI Bank shares fall 3.3 percent and State Bank of India falls 2 percent after RBI data showed that loan growth continues to remain a concern.

Reliance Industries shares fall nearly 2 percent, retreating after a 3.1 percent surge on Wednesday.

ABB shares fall 3 percent after the company reported a 74 percent fall in Oct-Dec net profit at Rs 167.7 million.

The top gainers (barely) on the Sensex: GAIL (0.06 percent) and Bajaj Auto (0.02 percent).

Even as Budget session highlighted measures taken to revive economy, equity market witnessed serious cuts in the afternoon trade amid high volumes. Sensex crashed 200 points to 19445.06 and Nifty fell 58 points to 5885.

ICICI Bank, which has a heavy weightage on the Nifty fell 2.9 percent impacting the performance of the index. Most stocks in the banking sector were under pressure after The RBI data showed banks have registered a 8.7 percent growth in advances this fiscal year, compared to 11.2 per cent in the previous year. Growth in deposits rose by 7.8 percent against 11.4 percent last year.

Jaiprakash Associates was trading down more than 4 percent and was the biggest loser on the index.

Metal counters too were beaten out of shape with Sterlite, Tata Steel, Sesa Goa and Hindalco falling in the 2.4-3 percent range.

Videocon managed to keep its head above water surging 9 percent after the consumer electronics and oil company said it was in talks to sell its 10 percent stake in an oil and gas block off the coast of Mozambique and Tanzania.

SpiceJet fell 4 percent after a research report suggested that Air Asia-Tata plan for budget airline will impact no-frill airlines.

Equity market extended losses by falling 1 percent tracking global cues. The biggest gainer on the sensex, Bharti Airtel, appreciated by a bare 0.5 percent reflecting the slaughtering witnessed on the street.

At 11.24 AM, the Sensex fell 179.50 points to 19463.25, and the Nifty slided 51.55 points to 5891.50.

Bank shares fell sharply a day after RBI data showed that the sector's loan growth continues to be a concern. The RBI data showed banks registering a 8.7 percent growth in advances this fiscal year, compared to 11.2 per cent in the previous year. Growth in deposits rose by 7.8 percent against 11.4 percent last year. ICICI Bank corrected more than 2 percent, while Axis Bank fell 1.36 percent. Country's largest lender State Bank of India slipped 0.8 per cent.

In the technology pack, HCL Tech showed some resilience, rising 1 percent. Wipro gained marginally and positioned as one of the top gainers on the Sensex, confirming the hopelssness on the street.

DLF, which was an outperformer in the last few sessions,  fell over 2 percent.

In the midcap segment, Videocon continued to lead with over 8 percent gains. The next gainer on the index, Fresenius Kabi, registered only

Fed's reluctance to approve the third Quantitative Easing (QE3) had resulted in pushing Indian equity markets, alreading reeling under consolidation phase, further lower. Hit by broadbase carnage, benchmark indices opened with deep cut with JP Associates leading the decline. The stock fell 3.2 percent in the opening trade. Largecap names like Sterlite, BHEL, Coal India, Sesa Goa, IDFC, Hindalco were down 1-2 percent each. Although Nifty was holding the 5900, exteremly negative breadth may take it down intraday.
 
The Sensex opened down 98.31 points but slipped 135.68 points by 9.30 AM to trade at 19507.07. The Nifty fell 36.85 points to 5906.20. None of the largecap names have moved up even 1 percent, with BPCL's bare 0.7 percent gain was the biggest. Index heavyweight Hindustan Lever, Cigarette major ITC, Refinery biggies HPCL were trading with marginal upticks.

Midcaps were the worst hit after the last few stabilising sessions. The index was down 1 percent. Top gainers include Videocon Industries and HMT, up 8 percent and 1 percent respectively. On the losing side, the index had names like Aurobindo Pharma, NBCC, SpiceJet, Purvankara and Peninsula Land; all down over 2-3 percent.

Budget Sesson of Parliament begins today, but it is unlikely to spur market.