In the second biggest fall since July 7, the Nifty and the Sensex plunged 1.58 per cent on Tuesday, largely due to unwinding of positions in equity derivatives ahead of Thursday’s expiry and negative cues from the Euro Zone and China. The Nifty closed at 8018, down 129 points, and the Sensex at 26,776, down 431 points.
Around ₹1.64-lakh crore of investor wealth was eroded on Tuesday as the global markets’ disappointment with the European Purchasing Manager’s Index data as also the rising unemployment levels in China rubbed off on Indian bourses.
“The flash composite Purchasing Managers’ Index for the Euro Zone came in at 52.3 in September, below forecasts of 53.5. It also marked a fall from August’s reading of 52.5 and hit a nine-month low,” said Sanjeev Zarbade, Vice-President – Private Client Group Research, Kotak Securities. “The selling pressure gained momentum after data released on Euro Zone economic activity indicated continuing weakness in the region.”
According to Amar Ambani, Head-Research, IIFL, “Going ahead, we expect the market to remain highly volatile ahead of the F&O expiry. Sentiment will also be affected due to the ongoing geopolitical uncertainty and global factors. However, the overall trend continues to be bullish.”
FIIs were net sellers of equity worth ₹1,185 crore and did an overall turnover of around ₹9,000 crore.
The benchmark index opened marginally higher at 27,245 against the previous close of 27,207. It made a high of 27,257 and low of 26,744 before closing at 26,776. BSE Small- and mid-cap indices plunged two per cent each to 10,969 and 9,696.
The turnover on BSE was up at Rs 4,047 crore against Rs 3,299 crore registered on Monday.
Markets may remain volatile this week as traders roll over positions in the futures and options segment from the near month September 2014 series to October. The September F&O contracts expire on Thursday.
Euro area business activity in September grew at the lowest rate seen so far this year, according to a market survey.
Pharma stocks dipped in BSE after the Department of Pharmaceuticals, under the Ministry of Chemicals and Fertilizers, scrapped guidelines issued in May giving powers to the National Pharmaceutical Pricing Authority fix prices of drugs that are not on the essential medicines list.
Sun Pharma was down two per cent at Rs 780, while Lupin fell two per cent to Rs1,356.
Reliance Industries dropped three per cent to `966. The company after market hours on Monday said that its subsidiary Reliance Jio Infocomm and Indus Towers have signed a master services agreement for tower infrastructure sharing. Under the agreement, Reliance Jio would utilize the telecom tower infrastructure services being provided by Indus Towers to launch its services across the country.
The major gainers were Glaxo (2%), MRPL (2%), HCL Tech (1%), Britannia (1%) and Shriram City Union Finance (1%).
Prominent losers were Unitech (-11%), Suzlon (-10%), Nalco (7%), DLF (-7%), Orient Bank (-6%), Adani Power (-5%), REC (-5%) and Bhushan Steel (-5%)