Sensex dips 298 points; ends below 17000, snapping 3-day gains

Snapping 3-day winning streak, the BSE Sensex fell below 17000, losing over 298 points to close at 16,867 on widespread profit booking amid weak global markets as US Fed comments on the economy and American  government's move on job creation failed to enthuse investors.

The Bombay Stock Exchange 30-share index opened strong and reached a high of 17,211.80.

However, it turned negative after weak European openings as US president Barack Obama's move to provide a $447 billion jobs package indicated higher taxes and led to concerns that it may be stuck in political wrangling.

US Federal Reserve Chairman Ben Bernanke also failed to give any indications of a new stimulus stimulus package during his speech yesterday as the world's biggest economy shows signs of slipping into recession.

The Sensex finally settled at 16,866.97, down 298.57 points or 1.74 per cent. It had gained 452.21 points or 2.70 per cent in the last three trading sessions.

The broader NSE 50-issue Nifty also tumbled 93.80 points or 1.82 per cent to 5,059.45.

The top Sensex heavyweight RIL, which was had gained in the past sessions, tumbled 3.33 per cent amid questions raised by Comptroller and Auditor General (CAG) over its violations in the production-sharing contract (PSC) with the government.

Second heavyweight and software bellwether, Infosys also dropped 2.88 per cent. The two contributed over 100 points to the Sensex fall.

Selling in other blue-chips like ICICI Bank, SBI, HDFC Bank, TCS, Sterlite Ind, Hindalco, Tata Steel, Tata Motors, L&T and ITC pushed it down further.

"Concerns over US economic growth led to negative sentiments. The measures proposed by Barack Obama failed to infuse confidence in global investors as they resorted to selling amid concerns of global recession," said Shanu Goel, Senior Research Analyst at Bonanza Portfolio.

Metal stocks suffered the most. Banking, IT, realty and auto segments also bore the brunt of selling.

From the metal segment, Sterlite Ind dipped by 5.49 per cent and was the top loser from the Sensex pack, followed by Hindalco (5.47 pc) and Tata Steel (3.20 pc) and Jindal Steel (2.39 pc). From the banking sector, SBI slumped by 3.68 per cent, ICICI Bank (2.49 pc) and HDFC Bank (2.34 pc).

Barring Taiwan, most of the other Asian stocks ended in the red after weakness on Wall Street yesterday. Key indices in China, Hong Kong, Japan, Singapore and South Korea ended lower between 0.05 per cent and 1.83 per cent.

European markets too were quoting down in the afternoon. The CAC was down 1.74 per cent, the DAX by 1.20 per cent and the FTSE by 0.71 per cent.

Overall, 23 of the 30 Sensex-based scrips registered losses while seven recorded gains at close. Other losers were Jaipra Asso (4.58 pc), Tata Motors (3.21 pc), DLF (2.56 pc), Maruti Suzuki (2.51 pc), Tata Power (2.27 pc), TCS (1.93 pc), BHEL (1.89 pc), NTPC (1.63 pc), Coal India (1.30 pc, L&T (0.94 pc) and ITC (0.73 pc).

Besides, 12 of the 13 sectoral indices settled with losses, while only BSE-Consumer Durables landed in the green. Metal tanked 3.16 per cent, Bankex (2.35 pc), Oil&Gas (2.30 pc), IT (2.29 pc) and Realty (2.05 pc).

The total market breadth at BSE turned negative as 1,663 stocks ended in the red, while 1,203 ended in the green. The total turnover rose to Rs3,133.70 crore from Rs2,699.05 crore yesterday.