Sensex, Nifty drop to 1-month lows as stocks fall for 3rd day, RIL and ONGC lose 3 per cent each

Slumping for third straight day, the Sensex dropped 276 points and Nifty fell over 90 points to end at one-month lows today as metal, power and banking bluechips crumbled due to coal mines deallocation while the oil and gas sector was hit by selling on deferment of a hike in gas price. Investor confidence appeared to plummet as heavy selling was seen mostly across-the-board. Not just blue-chips, two-tier counters too bore the brunt of a heavy sell-off, said traders.

Realty, capital goods, auto and consumer durable shares were also at the receiving end, they added. Besides, caution prevailed on the last day of September derivative contracts that also influenced market sentiments. The benchmark S&P BSE 30-share Sensex initially touched a high of 26,814.20 on the back of firm Asian cues prompted by strong closing on Wall Street yesterday after robust US housing data for August.
Later, however, emergence of selling pulled it down to a low of 26,349.55 before recovering some ground and concluding at one-month low of 26,468.36, a fall of 276.33 points or 1.03 per cent. In straight three days, it has plunged by 738.38 points or 2.71 per cent.

Pramit Brahmbhatt, Veracity Group CEO said, "For the third session in row, local indices fell. ONGC and RIL lost over 3 per cent each as government deferred decision on gas price hike. Indices are heading towards to post its first weekly fall in seven weeks."
As many as 23 Sensex stocks closed with losses led by Axis Bank, SBI, Hindalco, BHEL and ICICI Bank. However, TCS, Dr Reddys and GAIL closed higher among seven Sensex gainers. Similarly, the wide-based 50-issue CNX Nifty of the NSE also settled sharply down by 90.55 points at its one-month low of 7,911.85. It has logged an intra-day low of 7,877.35.
Metal stocks such as Jindal Steel and Power, Tata Steel, Hindalco, Bhushan Steel, Usha Martin, Monnet Ispat remained under pressure due to Supreme Court cancelling 214 mines. "We believe that the coal block cancellation could adversely impact India's nascent economic recovery...The impact will be felt across various channels and lead to a rise in non-performing assets of banking sector, an increase in the cost of coal and in turn a rise in power tariffs...," said India Ratings & Research.
Mixed Asian as well as European markets amid selling by foreign funds for the second day in a row also weighed on the sentiment. Liquidity flow from FIIs seems to be slowing down as FPIs/FIIs yesterday sold shares worth Rs 793.65 crore.