Equities took a beating of 300 points today to fall to a one-week low as investors saw odds of an early rate cut receding after inflation hardened in April amid fears that Sebi’s move to tighten P-Note norms would hit foreign fund inflows. Domestic shares, however, logged their first weekly gain in three on the back of quarterly earnings, which were so far in line with expectations, as Sensex rose 261.07 points or 1.03 per cent and Nifty climbed 81.45 points or 1.05 per cent in five days.
In a double whammy, government data yesterday showed that industrial production plunged to 0.1 per cent in March, while retail inflation jumped to 5.39 per cent in April.
“Weak inflation numbers caused speculation that Reserve Bank would hold off on cutting interest rates at its policy review next month, thus dampening investor sentiment,” said Shreyash Devalkar, Fund Manager Equities, BNP Paribas MF.
This send the banking shares sharply lower with SBI, ICICI Bank, Axis Bank and HDFC Bank down by up to 2.29 per cent.
Meanwhile, acting upon recommendations of an SIT on black money, Sebi is planning to tighten due diligence requirements for issuance and transfer of P-Notes and put the onus on investors to ensure compliance with anti-money laundering law.
The BSE Sensex stayed in the negative zone through out the day and touched a low of 25,400.27 before winding up 300.65 points or 1.17 per cent down at 25,489.57, its weakest closing since May 6.
The 50-issue Nifty broke below the 7,900-mark by plunging 85.50 points or 1.08 per cent to close at 7,814.90. Intra-day, it hovered between 7,784.20 and 7,881.00.
Broader markets too showed a downward trend with mid-cap and small-cap indices falling 0.58 per cent and 0.25 per cent, respectively.
In stock specific action, Dr Reddy’s lost 2.08 per cent to Rs 2,912.10 after the firm reported a 85.6 per cent decline in consolidated profit to Rs 74.6 crore for the fourth quarter.
Shares of Eicher Motors fell nearly 4 per cent after the company said two of its promoters and Eicher Goodearth Trust sold 4.2 per cent stake in it for Rs 2,100 crore.
Overseas, Japan led decline in Asian equities after a disappointing earnings season while Europe edged lower as oil snapped a three-day rally.
Key indices in China, Hong Kong, Japan, Singapore, South Korea and Taiwan moved down by 0.31 per cent to 1.41 per cent. France, Germany and the UK based shares dropped between 0.58 per cent and 0.67 per cent. In the domestic market, 27 scrips out of the 30-share Sensex ended lower.
Adani Ports was the biggest loser with a fall of 3.48 per cent followed by HUL 2.58 per cent, BHEL 2.50 per cent, HDFC 2.45 per cent, Tata Steel 2.36 per cent, L&T 2.31 per cent, ICICI Bank 2.29 per cent, GAIL 2.15 per cent, Dr Reddy’s 2.08 per cent and Bharti Airtel 1.84 per cent.
However, Asian Paints rose 1.70 per cent, Tata Motors gained 0.72 per cent and ITC jumped 0.09 per cent.
Among BSE sectoral indices, realty dropped 2.07 per cent, followed by metal 2.04 per cent, capital goods 1.57 per cent, consumer durables 1.43 per cent, bankex 1.25 per cent and finance 1.25 per cent.
The market breadth turned negative as 1,498 stocks closed lower, 1,050 finished higher and 174 ruled steady. The total turnover fell to Rs 2,507.83 crore from Rs 2,650.92 crore yesterday.