Sensex drops 239 as bears target largecaps; Bharti down 3%

Benchmark indices tumbled Wednesday, as bears targeted large caps across the board. Renewed speculation about early general elections, a dismal services PMI (Purchasing Managers Index) reading for March, and absence of institutional buying support aggravated the fall in the last hour of trade.

The BSE Sensex ended the day at 18801.64, down 239.31 points over its previous close. The Nifty fell 75.20 points to close at 5672. With this fall, indices have more than given up the gains of the last two sessions.

Realty, capital goods, auto and metal shares were among the worst performers, while pharma and FMCG shares managed to hold ground as investors sought safety in defensive sectors.

Shares of Adani Power led the rally in the power sector Tuesday, after a favourable verdict from the Central Electricity Regulatory Commission (CERC) on tariff hike.

Adani Power closed around 9 percent higher at Rs 47.65.

Bajaj Auto, Bharti Airtel, L&T, Tata Motors, HUL, Reliance Industries and ONGC were among the big losers of the day, shedding 2-4 percent.

Talk in the market is that foreign-owned exchange traded funds are pulling money out of India.

Midcaps fared comparatively better than frontline shares, with the decline not being as steep. Brokers say there is not much buying from local traders, most of whom are still licking the wounds suffered during the recent carnage in midcaps.

The Sensex is down over 250 points after gaining for four consecutive sessions. The Nifty has also breached 5700 mark on the downside.

BJP Leader LK Advani hints at early elections in 2013 which might have led to negative pessimism in the market. Udayan Mukherjee feels sharp sell-off in the market can also be partly accentuated by ETF funds liquidating stocks.

Technical analyst, Sudarshan Sukhani feels the current pullback rally is in danger of  fizzling out. Traders should keep the positional shorts intact.

Investors are turning more cautious ahead of January-March earnings due starting next week after the Sensex gained 1.92 percent in the previous four sessions.

The Sensex is down 224 points at 18813 and the Nifty down 71 points at 5676.

Auto stocks are major laggards after disappointing monthly sales numbers announced this week. Tata Motors is down 3.2 percent, Bajaj Auto is down 2.9 percent. M&M is down 2 percent.

Power stocks of Adani, Tata and Reliance groups are holding on to morning gains after CERC announced interim relief package for Adani Power. 

Defensive shares fall after recent gains: ITC falls 1 percent and Hindustan Unilever is down 1.2 percent after gaining 1.6 percent and 2.1 percent in the previous four sessions.

Reliance Communications Ltd rises 5.6 percent, a day after announcing a fibre optic network sharing deal with a unit of Reliance Industries, which is widely seen as benefiting both companies.

Other companies controlled by billionaire Anil Ambani gain on hopes the deal would lead to increased tie-ups with brother Mukesh Ambani.

Reliance Infrastructure Ltd rises 2.2 percent, while Reliance Capital Ltd gains 1.43 percent.

The market continued to drift lower in afternoon trade as the Nifty was struggling well below 5750 pulled lower by autos, telecom majors and select heavyweights. The Sensex was down 62.70 points at 18978.25, and the Nifty was down 20.80 points at 5727.30.

However, midcap index cooled off from the day's high, but managed to hold up in the green. BF Utilities (up 7.1 percent), Welspun Corp (up 6.9 percent), Pantaloon (up 7 percent) and Delta Corp Power (up 6.2 percent) were rallying, but midcap technology was under pressure.

Big gainers in the Sensex were Tata Power, Sun Pharma, NTPC, Jindal Steel and Tata Steel.

Glenmark was feeling some pain after Merck filed a suit in the Delhi High Court against the pharma company for violating its patents on diabetes drugs Januvia and Janumet. Januvia costs nearly Rs 1300 for a month's dose, while Glenmark is offering it at a 30% discount. The stock had fallen 1.92 percent.

Bharti Airtel, Bajaj Auto, Tata Motors, GAIL and M&M were some of the losers in the Sensex.

It was a flat market with negative bias for the frontliners. The Nifty was below 5750 weighed down by Bharti Airtel, autos and commodities. The Sensex was down 63.35 points at 18977.60 while the Nifty slipped 20.05 points to 5728.05.

However, the midcap index is holding up in the green led by news based stocks.

Vibhav Kapoor of IL&FS expects the Nifty to head lower to 5400. In an interview to CNBC-TV18 he said that a U-shaped recovery seems more likely for markets.

UB group stocks were under pressure after the Bombay High Court allowed Kingfisher's lenders to sell pledged shares of UB Group companies.

Sugar stocks are disappointed in trade as the cabinet did not take up the sugar de-control issue in its meet yesterday.

Meanwhile, top gainers in the Sensex were Tata Power, Sun Pharma, BHEL, NTPC and Jindal Steel.

Adani Power rallied 13 percent after the central electricity regulatory commission (CERC) offered a compensation package to the company till the fuel situation stabilises. The judgment has a favourable bearing on other imported coal-based projects such as those of Tata Power (up 4.4 percent) and Reliance Power (up 3.1 percent).

Reliance Communication was up another 5 percent after it signed the Rs 1200 crore deal with Mukesh Ambani's Reliance Jio.

The market seemed to be unmoved despite the Prime Minister Manmohan Singh's assurance to achieve 8 percent growth. The Sensex slipped down 65.65 points to 189975.30 while the Nifty was down 20.25 points at 5727.85.

Auto stocks were still reeling under dismal March sales number. Bajaj Auto, Tata Motors and Hero MotoCorp were some of the biggest losers of the day.

Sugar stocks continued thier downward journey on Wednesday as the Cabinet Committee on Economic Affairs (CCEA) did not take up the issue of sugar decontrol at its meeting last evening. Shree Renuka Sugars was down 3.23 percent, Balrampur Chini Mills fell 1.94 percent while Bajaj Hindusthan lost 2.20 percent.

Meanwhile, power stocks were rallying.  Adani power gained around 11 percent. In a big relief for the company, CERC set up another committee to review Adani Power's power purchase agreements. The judgment will also have a favourable bearing on other imported coal-based projects planned in the country such as those of Tata Power (up 4.6 percent) and Reliance Power (up 1.9 percent).

TVS Motor was up 8 percent as according to CNBC-TV18 sources the firm is likely to have finalised the alliance with BMW and the final deal will be announced on April 8.

Mangalore Chemical and Fertiliser was up another 11 percent after the 20 percent rise yesterday. Zuari Fertilisers has picked up 10 percent stake in Mangalore Chemicals- 8 percent from SBI and rest from open market.

Benchmark indices were down in early trade Wednesday, on likely profit taking after the rise in the last three sessions. Large caps were under pressure, with shares from the FMCG, oil & gas, and auto among the key laggards.

The Sensex was down 50 points at 18990, and the Nifty down 12 points at 5735.

Power shares were up, led by Adani Power (up 9 percent) after the company got a favourable ruling from the Central Electricity Regulatory Commission (CERC). Adani Power had been seeking a hike in power tariffs due to escalation in price of imported coal and scarcity of domestic coal. According to a report in the Mint newspaper, CERC has allowed a variable compensatory tariff to be offered to Adani Power till the fuel situation stabilizes.

Other power shares too rose, as the judgement is expected to strengthen the case for higher power tariffs for other imported coal-based projects of companies like Tata Power(+4 percent) and Reliance Power(+2 percent).

Reliance Communications shares were up around 6 percent to Rs 67, even as most experts think the Rs 1220 crore-deal with Reliance Jio will not help much in improving the company's balance sheet.

Vibhav Kapoor of IL&FS sees the Nifty declining to 5400-5500 near term due to disappointing macro data and weak corporate earnings.

Arindam Ghosh of Blackridge Capital Advisors feels corporate earnings may have bottomed out for now. However, he expects the recovery in the broader market to be gradual and does not see market sentiment improving meaningfully near term.