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Sensex drops for 1st time in six days; Nifty ends below 8,000

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The benchmark Sensex on Monday retreated from one-month highs and fell about 98 points to end at 26,752.90, logging its first drop in six sessions, on losses in bluechips like HUL, Tata Motors and RIL and caution ahead of the US Federal Reserve monetary policy meet. The NSE Nifty fell by about 23 points to end below the key 8,000-level as investors booked profits. Mixed Asian and weak European trends, after tepid German business confidence data, were also among factors that affected sentiments on Monday.

Shares of oil firms saw selling after Goldman Sachs slashed 2015 oil price target. Alongwith Oil & Gas, Realty, FMCG and Auto shares suffered the most while Consumer Durables, Capital Goods, Banking and Power ended in the green. The 30-share Sensex resumed firm on initial rise in Asian stocks but failed to cross 27K-mark, logging a high of 26,994.96. Late selling on bearish European opening pulled it down to settle at 26,752.90, recording a fall of 98.15 points or 0.37%. The Sensex had gained 851.71 points, or 3.28%, in the previous five sessions.

The broader 50-issue CNX Nifty of the NSE fell back by 22.85 points, or 0.29%, to end at 7,991.70. The US Federal Open Market Committee will meet tomorrow, October 28, 2014, for two-day monetary policy review, expecting to end a long-running stimulus programme. Domestic investors preferred to book profits and decided to play safe ahead of expiry of derivatives on October 30, 2014, leading to fall in share prices, said brokers.

Stocks of FMCG giant, Hindustan Unilever tumbled about 4.75% after it forecast a softer demand environment. Shares of realty giant DLF slumped 7.84% on concerns the company may face probe in Haryana land deals. Bucking the overall trend, stocks of companies involved in defence sector like BEML rallied 5 % after projects worth Rs 80,000 crore were cleared by the government. HMT counter surged nearly 20 % to touch its highest trading permissible limit for the day amid reports that the company may get another lease of life. 

"Markets pared its intra-day gains in the last hour of the trading session owing to fall in HUL.... Markets also seem to correct somewhat to discount the probable interest rate policy that Fed is expected to announce in its FOMC meet that is scheduled Tuesday and Wednesday," said Rakesh Goyal, Senior Vice President, Bonanza Portfolio. Shares of Jindal Steel and Power Ltd (JSPL) dropped by about 8% on reports the CBI has started a fresh inquiry against unknown officials of the company for alleged diversion of forest land in Jharkhand for mining purposes.

Globally, Asian stocks ended lower on concerns of slowdown in China. Key benchmark indices in China, Hong Kong and Taiwan dropped by 0.21% to 0.68% while indices in Japan and Singapore firmed up by 0.11% to 0.63%. European stocks were also trading lower. Indices in France, Germany and the UK moved down by 0.11% to 0.47%. Coming back to the local market, 17 scrips out of the 30- share Sensex pack ended lower while 13 others finished higher. Other major losers were Tata Motors (2.57%), ONGC (2.17%), Tata Steel (1.57%), Hindalco (1.31%), RIL (1.18%) and Wipro (1.09%) while BHEL rose by 4.98%, Dr Reddy 1.67%, Gail India 0.85% and Coal India 0.85%.

Among the S&P BSE sectoral indices, Realty dropped by 3.79%, followed by FMCG 1.06%, Auto 0.79% and Teck by 0.79% while Consumer Durables rose by 2.11%, among others. The total market breadth turned negative as 1,609 stocks ended in red and 1,245 finished in green. The total turnover rose to Rs 2,612 crore from Rs 650.71 crore last Thursday.

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