Key equity indices snapped their two-day gains and ended in the negative terrain on Wednesday. Intense selling pressure, coupled with weak global cues and sustained selling by foreign funds, forced the market to remain under pressure throughout the day.
The 30-share Sensex of the Bombay Stock Exchange (BSE) plunged by 513.49 points, or 4.81%, and closed the day at 10,169.90 points.
Earlier in the day, the Sensex opened with a negative gap and touched an intra-day high of 10,484.45 points and fell to a low of 10,128.22 points. The broader Nifty of the National Stock Exchange (NSE) also lost 169.75 points or 5.25%, ending at 3,065.15 points.
Amitabh Chakraborty, president-equity at Religare Securities Ltd, said, ?Japanese and Korean markets were down significantly. This spooked the sentiment further. The dollar has strengthened against all major currencies but the euro is down sharply.?
Intense selling was witnessed in metals, realty and banking sector stocks, which were the worst hit among the BSE sectoral indices. ?A short rollover was seen with fresh short build-up in Nifty. It seems FIIs have been selling in distress and with the rupee getting weaker, corporate dollar debt repayment is becoming a serious cause of concern. Crisil has indicated a possible corporate debt default in the future. In our view, a 10-15% downside exists and unless FIIs stop selling, it is difficult to predict what the trough,? added Chakraborty.
Barring FMCG, all sectors in the BSE ended the day in the red. Dealers in the market also said that poor quarterly results by Wipro, Century Textiles and Reliance Infrastructure gave a bearish outlook to the market.
The overall breadth of the market remained negative throughout the day as out of 2,588 stocks traded on the BSE, 1,733 ended in the red and 778 in green, while 77 remained unchanged. In the Sensex pack, only two stocks advanced while the remaining 28 declined.
Hitesh Agrawal, head of research at Angel Broking, said, ?The two-day rally which we observed was only on the back of strong measures taken by the government and the Reserve Bank of India to infuse liquidity into the market. But in this global scenario, we assume that the markets are going to remain under pressure for a few more months.?
As per the provisional figures furnished by the BSE, FIIs were net sellers at Rs 543.95 crore, while domestic institutional investors were net buyers at Rs 404.05 crore.
?We may see some positives short-term rally in the markets, but I don?t think it can sustain. The overall sentiments of the market is negative and with FIIs continuously selling stocks, the markets are going to remain volatile,? added Agrawal.