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Money Jul 26, 2012

Nifty ends below 5100, select mid-caps plunge on massive sell-off

By Firstbiz Staff

It was a volatile day for the markets with the Sensex closing 206.23 points or 1.22 percent lower at 16,639.82 and the NSE Nifty closing 66.60 points or 1.30 percent lower to 5,043. This is the lowest close since early June.

The fall may be attributed to the volatility in last half an hour of the expiry of the July F&O series.Market experts told CNBC-TV 18 that traders may have wound up their long positions that had built up on expectations of diesel price hike or some other reforms from the government post presidential election. Lack of policy action could also drag Nifty closer to 5,000 in the coming week.

AFP

But the biggest buzz in the markets today was the sudden plunge of select mid caps stocks. Shares of Tulip Telecom, Everonn Education, Parsvnath Developers, Radico Khaitan, Glodyne Techno, Pipavav Defence, SRS, Nitin Fire, among others, plunged over 10 percent in early trade on the back of huge volumes.

Rumours suggest a couple of brokers who pledge shares for corporates in return for collateral, are facing a liquidity crisis, and this is what triggered the sell-off in the shares of nearly a dozen mid-cap companies , causing a 10-25% decline in stock price, explains Moneycontrol editor Santosh Nair.

"One of the names doing the round is of a leading Kolkatta-based broker, who was implicated for his role in the stock market scam of 2001," he said.

Meanwhile, the turnover today at the stock exchanges is close to Rs3 lakh crore.

The Bank Nifty witnessed biggest percentage fall since June 18 and closed 160 points lower.

Banks retreated on expectations the Reserve Bank of India will keep interest rates on hold next week, while ITC fell after cigarette volume growth dipped in the latest quarter. HDFC bank fell 1.6 percent, while State bank of India fell 2.5 percent. ITC shares lost 1.8 percent.

Ambuja Cements, Bajaj Auto, Sun Pharma, Power grid Corp and NTPC are among the gainers in Sensex and Nifty.

PNB, SAIL, DLF, Tata Power, Tata Motors, RInfra, cairn India, SBI, Axis Bank, Wipro, ONGC, Sterlite Inds, HDFC Bank and ICICI Bank are among losers in Sensex and Nifty.

Global cues failed to lend support to the ailing equity markets. European shares, after getting a flattish start, edged lower on persistent worries about Spain and Greece, while disappointing company earnings too undermined investors' confidence. On the other hand, Asian pacific shares mostly ended in green, on bargain hunting after recent sharp drops and also on heightening hopes for more US stimulus to support growth and new European policy measures to keep the eurozone debt woes from deepening further, said Nirmal Bang in a report today.

Stocks in news

Monnet Ispat Energy, plummeted over 14% after the Supreme Court upheld the Jharkhand high court's order regarding the cancellation of mining leases of six private mining companies, including that of Monnet Ispat.

BHEL, took the markets by surprise on reporting a 13% jump in its Q1FY13 net profit at Rs 921 crore on Y-o-Y basis, which took the stock soaring higher over a percentage point.

Additionally, top cement maker, Ambuja Cement, shot over two percent on reporting 35% jump in its net profit for second quarter ended June 30, 2012 at Rs 468.90 crore as compared to Rs 347.50 crore for the corresponding quarter of the previous year.

On the flip side, Cigarette major ITC, lagging market forecasts, reported 20% jump in net profit at Rs 602.14 crore for the fiscal first quarter ended June 30, as compared to Rs 1,332.72 crore for the quarter ended June 30, 2011, which pushed the stocks lower over quarter of percent.

by Firstbiz Staff

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