Sensex drops 251 points as oil, gas scrips slip on price decision

The benchmark Sensex today fell about 251 points, posting its biggest drop in six days, as shares of ONGC and Reliance Industries skidded after a decision to hike natural gas prices was deferred and investors adopted a cautious stance on expiry of monthly derivative contracts.

The BSE Sensex resumed lower at 25,217.69 points and continued to lose momentum to touch an intra-day low of 25,021.23. It settled at 25,062.67, down 251.07 points, or 0.99%. It had lost 55.16 points yesterday. The index's drop today was its steepest since 274.94-point fall on June18. Out of the 30-share Sensex, 18 stocks closed with losses led by oil and gas stocks, while 12 others ended higher. The 50-share NSE index Nifty dipped below the crucial 7,500 mark by losing 76.05 points, or 1%, at 7,493.20 after shuttling between 7,570.20 and 7,481.30 intra-day. "Overall market sentiment was hit as the government decided to defer revision in gas prices for three months. This has been taken negatively by the market, as it was contrary to the general expectations," said Rakesh Goyal, Senior Vice President, Bonanza Portfolio.

Shares of state-run ONGC plunged by 5.89% and RIL fell 3.70%. Oil marketing companies BPCL, HPCL and Indian Oil too were under selling pressure. Expiry of June month series in the equity derivative contracts and fresh selling by foreign funds also affected the market sentiment, dragging down the benchmark indices. "Sentiment further deteriorated after an update on weak monsoon by IMD," said Jayant Manglik, President-retail distribution, Religare Securities.

Automobile stocks, however, remained firm after the government yesterday extended excise duty concessions by six months, and capped the fall in the benchmark Sensex. Maruti Suzuki, Bajaj Auto, Hero MotoCorp, M&M ended higher. Recent outperformers in realty, PSU, metals, banking and power space saw selling. Sectorwise, the BSE oil and gas sector index suffered the most by plunging 3.88%, followed by realty index (2.74%) among others. Meanwhile, Foreign Portfolio Investors (FPIs) bought shares worth Rs 694.63 crore yesterday, as per provisional data from the stock exchanges.