Sour start to 14: Sensex logs first Day-1 drop since 2006

Written by PTI | Mumbai | Updated: Jan 2 2014, 08:35am hrs
The benchmark Sensex gave up initial gains in a lacklustre session on Wednesday in absence of global triggers, ending with a 30-point loss and logging a drop on the opening trading day of the year for the first time since 2006.

Most global stock markets, including those in Asia, Europe and New York, were closed on Wednesday. Reliance Industries, TCS and Infosys shares were the biggest drag on the index, which received some support from Bharti Airtel. Wipro and Tata Power fell.

Three of the 12 BSE sectoral indices IT, tech and oil & gas fell. The realty sector index notched up a huge jump while the others eked out minor gains. The S&P BSE Sensex opened higher and climbed to 21,244.35. It traded in a 110-point range before ending at 21,140.48, a loss of 30.20 points or 0.14%.

It was the first drop for the index on day one of the year since January 2, 2006, when the Sensex fell 7.8 points.

The broader, 50-share CNX Nifty on the National Stock Exchange was down 2.35 points at 6,301.65. Though the index fell, the market breadth was strong as retail investors bought second-line stocks. The small-cap and mid-cap indices outperformed the Sensex with gains of 1.5% and 0.47%, respectively.

Government data released after market hours on Tuesday showed India's fiscal deficit touched 93.9% of the annual target in April-November. An index of eight core industries grew 1.7% in November from 5.8% a year earlier.

Foreign institutional investors bought shares worth a R309.70 crore on Tuesday, according to provisional data from the stock exchanges.

US stocks rose to record highs on Tuesday with the Standard & Poor's 500 Index posting its best year since 1997. The Dow Jones Industrial Average ended 2013 with a gain of 26.5%, the most since 1995, and the Nasdaq Composite Index surged more than 38%, its biggest gain since 2009.

All is not over for retail investors. We strongly believe that the time has come where mid-cap and small-cap stocks will ride the boom now in 2014, said Kishor P Ostwal, CMD of CNI Research. High-value stocks may become very expensive and profit booking will start at higher levels. This simply suggests there will huge action in 2014 to bridge the valuation gaps of small caps and mid caps with large caps," Ostwal added.