Profit-taking pulls Sensex down 255 pts

The Indian equity markets on Wednesday witnessed the sharpest fall in nearly one-and-a-half months on back of huge selling in last hour of trade by institutional investors.

CNX Nifty fell by 80.45 points or 1.30% to 6122.90 while the S&P BSE Sensex too closed down by 1.22% or 255.69 points at 20,635.13. The benchmark Sensex fell by over 310 points in intraday trades before recovering slightly at close of session.

The sharp fall was surprising given Ben Bernanke’s dovish statement issued on Tuesday night in which he reiterated his easy monetary policy stance. The fall was on very low volumes as domestic institutional investors net sold equities worth just Rs 284 crore even as foreign investors’ net inflows largely remained muted at Rs 80.4 crore.

The breadth was largely negative with 26 out of 30 Sensex stocks ending with losses. The half of Sensex fall was contributed by ICICI Bank (down 2.84%), Reliance Industries (down 1.51%), Infosys (1.2% down), HDFC Bank (down 1.55%) and HDFC Limited (down 1.2%).

Going ahead, experts believe the market is likely to remain range bound with no major triggers.

“As of now, the sentiments are mainly weighing on the rupee movement, which after the recent surge, witnessed some weakness on the back of dollar demand from domestic oil market companies. Hence, we are reiterating our consolidation bias for the index and advise to maintain cautious approach in trading,” said Jayant Manglik, president- retail distribution, Religare Securities Limited.

The rupee closed weaker at 62.58 falling 20 paise against the greenback.