The Bombay Stock Exchange benchmark Sensex erased its early gains today and dipped 151 points to 18,502 on across-the-board selling, partially triggered by weak Q1 results and guidance by IT major Wipro and interest rate hike worries after the Government said inflation will remain sticky till December.
Besides Wipro, which lost 4 per cent, other Sensex heavyweights like RIL, ICICI Bank, HDFC Bank, TCS, Hindalco, Tata Power and Jaiprakash industries were all down.
In all, 12 of the 13 sectoral indices closed in the red, while only FMCG ended in the green due to rise in ITC. Power, pharma, capital goods, auto and banking were hit the most.
Brokers said that besides weak Wipro guidance, a Finance Ministry note saying that inflation will remain “sticky” till December signalled that RBI may be aggressive in hiking the key rates at its monetary policy review next week, weighing down the market sentiment.
Inflation was 9.44 per cent in June, much above the RBI’s comfort level of 5-6 per cent.
The Bombay Stock Exchange 30-share index, Sensex, opened firm and touched a high of 18,765.60 on strong Asian trend.
However, selling pressure pulled it down to close at 18,502.38, down 151.49 points or 0.81 per cent. Yesterday, it had gained 146.83 points or 0.79 per cent.
Similarly, the broad-based NSE 50-issue Nifty also dropped by 46.50 points or 0.83 per cent to 5,567.05.
“Wipro’s Q1 FY’12 results were marginally below expectations. The guidance of a 0-2 per cent growth in organic revenues in Q2 was a negative surprise,” said Kotak Securities Senior Vice-President, Mr Dipen Shah.
CNI Research Research Head, Mr Kishor Ostwal, said despite all positive signals from global markets, Dalal street ended in the negative territory on profit-booking as Wipro’s guidance was below expectation.
“Indian market today shrugged off the gains of the Asian and European markets on worries over quarterly earnings,” said Religare Securities Head (Retail Research), Mr Rajesh Jain.
He said worries over ‘sticky inflation’ and high interest rate regime have been weighing on investor sentiment.
Asian markets, except China, closed with gains. The key benchmark indices in Hong Kong, Japan, Singapore, South Korea and Taiwan closed up between 0.46 per cent and 2.13 per cent, while those from China declined by 0.10 per cent.
European stocks too were trading firm in their afternoon trade. A meeting of euro zone leaders is scheduled tomorrow to finalise a bailout package for Greece.
Back home, FIIs, after slight selling on Monday, turned buyers and picked up shares worth Rs 293.29 crore yesterday as per provisional data.
In all, 26 out of 30 Sensex-based scrips finished with losses while others closed with gains. Wipro, the third largest software exporter of the country, was the top loser from the Sensex pack with a fall of 3.95 per cent following muted 1 per cent growth in bottom line in the first quarter.
It was followed by Hindalco, which dipped 2.71 per cent, Jaiprakash Associates (2.51 per cent), Tata Power (1.98 per cent), Hero Honda (1.9 per cent), NTPC (1.83 per cent), M&M (1.59 per cent), HDFC Bank (1.56 per cent), SBI (1.56 per cent), ICICI Bank (1.55 per cent), Tata Motors (1.55 per cent), BHEL (1.28 per cent), HDFC (1.03 per cent) and Reliance Infra (1.01 per cent).
From the sectoral indices, BSE-Power tumbled by 1.73 per cent, Healthcare (1.71 per cent), Capital Goods (1.45 per cent), Auto (1.42 per cent) and Bankex (1.34 per cent).
The total market breadth on the BSE turned negative as 1,696 stocks ended in the red against 1,195 that settled in the green. The turnover rose further to Rs 3,165.65 crore from Rs 2,863.12 crore yesterday.