Sensex slips 266 pts, Nifty at 1-mth closing low; Midcap dives 3% on global woes

Bears continued to keep tight control over Dalal Street as the Sensex crashed 375 points intraday Thursday, though there was some recovery in late trade. Investors monitored geopolitical tensions surrounding North Korea that hit sentiment across the globe.

In addition, India-China border crisis also does not seem to be ending soon as sources told News18 that the Indian Army has ordered the evacuation of a village close to the Doklam India-Bhutan-China tri-junction.

The 30-share BSE Sensex was down 266.51 points or 0.84 percent at 31,531.33. The 50-share NSE Nifty managed to hold 9,800 level but ended at one-month closing low, down 87.80 points or 0.89 percent at 9,820.25 after hitting an intraday low of 9,776.20.

On the global front, France’s CAC, Germany’s DAX and Britain’s FTSE were down between 0.4 percent and 1.2 percent at the time of writing this article. Asian markets also remained jittery, with the China’s Shanghai Composite and Hong Kong’s Hang Seng closing down 0.4-1.1 percent.

The broader markets butchered badly as the BSE Midcap index was down 2.6 percent and the Smallcap lost 2.9 percent on weak breadth. In three consecutive sessions, these indices crashed more than 5 percent.

About six shares declined for every share rising on the BSE.

“You can call it a transition phase… the Nifty could test the lower end of the target of 9,300,” Gautam Shah, Associate Director & Technical Analyst at JM Financial told CNBC-TV18 in an interview.

He expects a correction of 5-10 percent from here as well.

The recovery seen in late trade could be because of short covering and may be after the Securities and Appellate Tribunal (SAT) has stayed SEBI’s order against J Kumar Infra & Prakash Industries, which were among the 331 companies that the market regulator had suspected as ‘shell’ companies. Trading will be resumed in these two stocks.

Healthcare, auto and banking & financials pushed the market lower today but technology bucked the trend on rupee depreciation and buying interest.

Tata Motors was biggest loser among Sensex stocks, down 8.6 percent to close below Rs 400 level, at Rs 380.90, the lowest closing level in 15 months. Analysts cut earnings estimates for FY18 and FY18 after disappointing earnings for the quarter ended June 2017. CLSA slashed target price on the stock to Rs 380 from Rs 405 earlier.

Coal India (down 1.44 percent), Sun Pharma (down 3 percent) and Dr Reddy’s Labs (4.77 percent) also hit fresh 52-week low intraday while Lupin (1.9 percent) was close to its one-year low.

The fall in healthcare stocks was mainly due to pricing pressure in the US and recent appreciation in rupee. Dr Reddy’s Labs was third major loser among Sensex stocks, especially after its Bachupally manufacturing unit (in Hyderabad) is not renewed by German regulator post inspection. Hence, the unit won’t be able to despatch to European Union until next inspection.

BHEL cracked 5 percent after the company’s Q1 earnings missed analysts’ expectations.

HDFC, Reliance Industries, SBI, Adani Ports and Cipla fell upto 3 percent whereas Infosys (up 1.4 percent) and Tech Mahindra (up 2.7 percent) bucked the trend.
Motherson Sumi was down 3.8 percent after weak Q1 earnings while Bharat Forge fell over a percent due to market conditions but its earnings were better-than-expected.