Sensex fails to keep early lead, slumps to 3 month low

Mumbai: Stocks saw a positive start on October 17, only to reverse the trend later as the Sensex fell about 144 points to end at an over 3-month low, unnerved by muted start to second quarterly earnings and a lacklustre global trend.

The numbers from both TCS and Infosys fell short of the crease as investors did not seem impressed. What clouded sentiment further was US Fed chief Janet Yellen's commentary on the US economy, indicating the need for aggressive steps to reboot it.

The effect was immediate as indices globally started turning weak. Shares of state-run oil retailers such as Bharat Petroleum, Indian Oil and Hindustan Petroleum fell after rising over 1 per cent each in early deals due to a hike in petrol and diesel prices. Investors are betting on a hike in interest rates by the US Fed before the end of this year, brokers said, adding that profit-booking only hastened the fall.

The BSE index ended lower by 143.63 points, or 0.52 per cent, at 27,529.97, its lowest close since July 8. The gauge had edged up 30 points in the last session on Friday.

"Nervous global markets following Fed chair's comments last Friday, and sustained selling by FIIs seen all through last week look to have pricked sentiment, sparking long liquidation," said Anand James, Chief Market Strategist, Geojit BNP Paribas Financial Services.

Barring banking, all sectors ended lower with auto, capital goods and realty closing down by up to 2.12 per cent. The NSE Nifty closed lower by 63 points, or 0.73 per cent, at 8,520.40. Intra-day, it shuttled between 8,615.40 and 8,506.15.

As many as 24 stocks in the Sensex group fell and only six rose. M&M was battered the most as it plunged by 3.22 per cent, followed by Hero MotoCorp (2.24 per cent), Asian Paints (2.07 per cent), HDFC Bank (1.87 per cent), Bajaj auto (1.80 per cent), L&T (1.71 per cent) and RIL (1.67 per cent).

Banking shaped up well as concerns about bad loans eased after Russian Rosneft-led group took over private oil firm Essar Oil in an all-cash deal valued at about USD 13 billion. ICICI Bank surged the most since March, climbing 6.91 per cent. SBI too ended higher by 0.48 per cent.

BSE auto suffered the most by falling 2.12 per cent followed by capital goods (1.47 per cent), realty (1.19 per cent) and metal (1.19 per cent). Broader markets put up a similar show, with the mid-cap index falling 0.95 per cent and small-cap dropping 0.52 per cent.

Foreign portfolio investors (FPIs) sold shares worth a net Rs 946.42 crore on Friday, showed provisional data. Regional markets were mostly lower with China's Shanghai Composite falling 0.47 per cent and Hong Kong's Hang Seng 0.82 per cent.

Japan's Nikkei rose 0.26 per cent. Europe was in the grip of weakness as investors remained cautious ahead of earnings amid speculation about ECB policy as concern resurfaced about the health of the global economy.

London's FTSE declined 0.78 per cent, Paris CAC 30 0.55 per cent and Frankfurt's DAX 0.54 per cent in their early session.