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Rediff.com  » Business » Sensex drops 188 points amid growth concerns

Sensex drops 188 points amid growth concerns

Last updated on: April 25, 2014 16:16 IST

Sensex drops 188 points amid growth concerns

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Tulemino Antao in Mumbai

Markets succumbed to profit taking in the second half of the trading session, amid growth concerns, with private banking majors and index heavyweights ITC and Reliance Industries leading the decline.

The 30-share Sensex ended down 188 points at 22,688 and the 50-share Nifty closed 58 points lower at 6,783.

A Reuters poll showed that probability of strong economic rebound are dim regardless of election outcome as industry remains weak.

The disruptive weather phenomenon El Nino could shave as much as 75 basis points off the country’s economic output as a hit on agriculture could cause the central bank to delay cutting interest rates.

Inflationary pressures could cause the Reserve Bank of India to keep interest rates high, affecting economic growth, according to a Bank of America Merrill Lynch report entitled ‘El Nino: Met sees sub-normal rains.’

The rupee is trading higher at 60.71 compared to its previous close of 61.07 shrugging off weakness in the equity markets.

However, the rupee could weaken later today on account of month-end dollar demand from oil importers.

Asian markets remained subdued for most part of the trading session today as emerging crisis in Ukraine dampened investor sentiment. The Nikkei trimmed most of its early gains to finally end 0.2% higher.

Shanghai Composite ended down 1%, Hang Seng slipped 1.5% and Straits Times closed 0.5% lower.

The crisis in Ukraine also impacted European shares since early trades with all the major indices in the continent trading with losses. The CAC-40, DAX and FTSE-100 were down 0.2-0.8% each.

The BSE FMCG and Oil and Gas indices were the top losers among the sectoral indices down over 2% each followed by Bankex, Capital Goods and Power indices.

FMCG majors ITC and Hindustan Unilever were among the top losers which ended down over 2.6% each contributing the most to the Sensex decline.

Index heavyweight Reliance Industries ended down 2.1% at Rs 947.40.

Banks which are a proxy to the economy ended weak. ICICI Bank ended down 2.3% on profit taking after it's shares firmed up from Rs 1,000 levels in the run-up to its fourth quarter earnings.

The bank posted a 15% rise in quarterly net profit, beating estimates, helped by a surge in demand for loans from retail customers and higher fee income. HDFC Bank ended down 1.1%.

Axis Bank rebounded in late trades to end up 1% . The bank reported an 18.4% jump in net profit at Rs 1,842 crore for the quarter ended March 31, 2014. It was Rs 1,555 crore in the same period a year ago.

Maruti Suzuki ended 1.3% lower at Rs 1,956 after reporting poor set of numbers in the fourth quarter.

The auto major reported a 35.5% decline in fourth-quarter profit, missing estimates, as potential car buyers postponed their purchases and waited for a slowing economy to pick up.

Other Sensex losers include, ONGC, TCS and L&T.

Sensex gainers include Mahindra and Mahindra which rallied 3.2% to Rs 1,070 after Credit Suisse upgraded its rating on M&M to "outperform" from "neutral". Other gainers include, HDFC and Dr Reddy's Labs.

Among other shares, Cairn India dipped 5% to end at Rs 335 on the NSE after the company guided that the output for the current financial year would remain flat.

Strides Arcolab rallied 13% to end at Rs 527 after USFDA approved its Oral Dosage Forms manufacturing site (KRS Gardens) in Bangalore.

Wockhardt ended 2.1% down at Rs 646 after Himachal Pradesh suspended the manufacture and sale of one of its products.

Deepak Fertilisers and Chemicals ended up 1.8% at Rs 127 after the company's arm acquired additional 0.84% stake in Mangalore Chemicals and Fertilisers.

The broader markets also witnessed profit taking with BSE Mid-cap down 0.3% and Small-cap index ended down 0.6%.

Market breadth was weak with 1,547 losers and 1,274 gainers on the BSE.


Image: The Bombay Stock Exchange.
Photographs: Arko Datta/Reuters
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