Sensex drops 148 points to close below 20,000 level

The BSE benchmark Sensex today dropped by 148 points, led by metal major Sterlite Industries, to end below the 20,000 level for the first time in four days on profit booking and weak European cues.

Extending losses for the second straight session, the 30-share barometer of the Bombay Stock Exchange closed lower by 148.52 points, or 0.74 per cent, at 19,956.34, with most of the losses coming in from Sterlite, ITC, ONGC, ICICI Bank and Bharti Airtel.

The National Stock Exchange's 50-share Nifty Index too slipped below the 6,000 mark and ended 0.63% down at 5,991.30.

After starting with smart gains, the benchmark indices were unable to hold on to their gains due to profit booking witnessed at higher levels. The BSE Sensex fluctuated between a high of 20,234.05 and a low of 19,923.11.

Stocks may remain volatile this week as traders roll over positions from the near-month September series to October series ahead of the expiry of September derivatives contracts tomorrow, brokers said.

"Market players preferred to stay cautious and book profits ahead of the F&O expiry. In addition, unfavourable breadth was another cause for worry," IIFL vice-president (research) Amar Ambani said.

Anil Agarwal-run Vedanta Group firm Sterlite Industries was the worst performer in the Sensex pack and sank 8.58%, following an order by the Madras high court for closing the company's copper smelter plant in Tuticorin in Tamil Nadu on environmental grounds.

Other metal stocks too were under pressure, with Hindalco dropping 2.63% and Jindal Steel by 0.51%.

"The event after VAL debacle (Orissa mining issue) has once again intensified the uncertainty to the stock," brokerage house Prabhudas Lilladher said in a note.

Brisk selling was witnessed in FMCG and consumer durables stocks also. Bharti Airtel fell by 2.8%, ITC by 2.75%, ONGC by 2.6%, Reliance Infra by 2.49% and Maruti Suzuki by 2.26%.

Reliance Industries, which has the maximum weight in the Sensex, ended with a marginal gain of 0.08% at Rs999.

Barring, IT, auto and pharma, all the sectoral indices on the BSE ended in the red.

In the Sensex pack, 23 stocks ended with loss, while 7 scrips managed to close in the green.

ICICI Bank lost 1%, HDFC 1.33% and HDFC Bank 0.41%.

However, Tata Motors bucked the trend and ended with a gain of 2.45% to emerge as the best performer in the BSE-30 pack.

SBI moved up by 0.24%, Hero Honda by 0.24%, BHEL 0.19% and Tata Power 0.11%.

Mahindra Satyam ended 0.10% higher at Rs98.90, ahead of its financial results.

European stocks were trading lower in afternoon trade and the UK's FTSE was down by 0.17%.

However, most of the other Asian peers ended in the green today. The key benchmark indices in Hong Kong, Japan, Taiwan, Singapore and South Korea rose by between 0.28% and 1.22%.

US stocks climbed yesterday despite drops in consumer confidence and central-Atlantic manufacturing conditions, as investors saw the economic weakness as a sign the Federal Reserve may be more likely to introduce more stimulus.