Sensex plunges over 350 pts as banking stocks take hammering

Bearish mood persisted in equity markets at the start of the current week’s trading session, as the weak IIP data announced last Friday coupled with correction in other Asian market peers prompted investors to further cut their position here. Extending the fall, the Sensex retreated sharply and tumbled 372 points to touch a low of 26,263.79 amid selling in banking and other frontline stocks. [caption id=“attachment_2772580” align=“alignleft” width=“380”]  Reuters[/caption] At 12.10 pm, the 30-share BSE S&P Sensex was at 26,271.63, down 364.12 points or 1.4 percent lower, while the broader 50-stock CNX Nifty slipped below the crucial 8,100-mark and was at 8,066.05, down 104 points, or 1.3 percent. In previous two trading sessions, the Sensex dropped nearly 400 points, taking a breather after the sharp run-up in recent weeks. Brokers said market mood took a hit after a government data, which was released after trading hours on Friday showed industrial output contracted by 0.8 percent in April, the first decline in three months, due to drastic fall in capital goods production and manufacturing activities. Among the frontline laggards, shares of ICICI Bank plunged 3.3 percen to Rs 244.40, Axis Bank declined 2.2 percent to Rs 529.40 and SBI was down 2.1 percent at Rs 201.80. Others such as Tata Steel eased 2.6 percent to Rs 326.10, BHEL also fell 2.6 percent to Rs 120.40, L&T declined 1.8 percent to Rs 1,460 and ONGC was down 1.7 percent at Rs 214.35. Meanwhile, inflation data, is slated for later in the day. A weak trend in other Asian markets in line with sell-off in the US and Europe on Friday, on renewed worries about the global economy and uncertainty over Britain’s future in the European Union, also dented sentiment here, brokers said. Caution also prevailed ahead of the US Federal Reserve meeting next week, they added. Hong Kong’s Hang Seng was down 2.56 per cent, Shanghai’s Composite index fell 0.67 per cent while Japan’s Nikkei shed 2.61 per cent in their early trade. Meanwhile, the US Dow Jones Industrial Average ended 0.67 percent lower in Friday’s trade. The currency markets also displayed a weak trend in early trade, with the rupee again hitting the 67-mark against the US dollar after plunging 24 paise in early trade on sustained demand for the American currency from importers and bankers amid a lower opening in the domestic equity market. The dollar was firm against some global currencies which also weighed on the rupee, dealers said. On Friday, the local currency ended 5 paise lower at 66.76 a dollar on persistent demand for the US dollar from banks and importers and weakness in equities. With PTI inputs