Sensex cracks 796 points; Nifty barely holds 19,900; PSU banks dive; EKI Energy jumps 19%

Domestic equity markets extended their weakness for another session and settled with big cuts on Wednesday. Benchmark indices remained under severe selling pressure, which intensified in the later half of the day, thanks to weaker global cues. All round selling added more pressure on the indices.

Traders are awaiting the US Federal Reserve meeting outcome due later in the day, followed by actions by other central banks. Back home, selling in HDFC Bank after analysts meet and block deals in Reliance Industries kept traders on the tenterhooks for the day.

For the day, BSE's barometer Sensex crashed 796 points, or 1.18 per cent, to settle at 66,800.84, while NSE's Nifty50 plunged 231.90 points, or 1.15 per cent, to end at 19,901.40. Broader markets also settled in red as BSE midcap and smallcap indices fell up to half a per cent each. Fear gauge India VIX surged about 3 per cent to 11.13-level.

Correction has been due for some time and valuations too were getting expensive after the recent spike, and hence investors resorted to profit-taking ahead of the outcome of the US FOMC meeting on interest rates. Ongoing tension between US & Canada could have some bearing on the markets, said Shrikant Chouhan, Head of Research (Retail), Kotak Securities.

"Technically, intense selling saw the Nifty slip below the 20000 mark, which is largely negative. For the bulls now, 20,000- 20,030 could act as immediate resistance areas while 19,825-19,775 could act as a crucial support zone for the traders," he said.

All the sectoral indices ended in red. The Nifty metal index weakened about 2 per cent, while the Nifty Financial Services, PSU bank, private bank and realty indices dropped more than a per cent each. Weakness in oil & gas, auto, FMCG and healthcare indices also weighed on the markets.

In the Nifty50 pack, HDFC Bank dropped about 4 per cent, leading the laggards. It was followed by JSW Steel which tumbled about 3 per cent. Reliance Industries, Bharat Petroleum, UltraTech Cement and Dr Reddy's Laboratories declined more than 2 per cent each. State Bank of India, Hero MotoCorp and HDFC Life Insurance were the other laggards.

Among the gainers, Power Grid jumped more than 2 per cent, while Coal India surged more than a per cent for the day. ONGC and Asian Paints added about a per cent each. Sun Pharmaceuticals, Eicher Motors, NPTC and Axis Bank were the other key gainers in the blue-chip index.

The domestic markets remained under pressure due to rising US bond yields and a stronger greenback. Concerns reigned over upcoming FED policy, interest rate trajectory and rising oil prices. Bank Nifty underperformed today due to rising cost of funds and reduction in deposits leading to moderation in net yield, said Vinod Nair, Head of Research at Geojit Financial Services.

A total of 3,803 shares were traded on BSE on Wednesday, of which 2105 settled with cutes. 1,554 stocks ended the session with gains while 144 shares remained unchanged. A total of 304 shares hit their upper circuit, whereas the 206 shares tested the lower circuit levels for the day.

In the broader markets, Cressanda Solutions plunged about 9 per cent, while Ramkrishna Forgings, Indian Overseas Bank and UCO Bank dropped 6 per cent each. The Central Bank of INdia declined 5 per cent, while GMR Power & Urban Infra, MTNL and GTL Infra also posted similar cuts.

Among the gainers, EKI Energy Services surged more than 19 per cent, while AGI Greenpac surged about 17 per cent. Blue Star and IFCI gained over 13 per cent each, while National Peroxide gained 12 per cent. Precision Wires India settled 11 per cent higher for the day.

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