Its a bad week for the markets as the Sensex crashed by 281 points to close at 16,877 points, well below the 17,000 mark. The S&P CNX Nifty also fell 87 points and closed at 5,117.95 points. The 1.6 percent provisional fall in the Sensex makes it one of the biggest percentage fall since May 16, as investors booked profits in recently outperforming sectors such as banks as global risk aversion hammered Asian shares.
The markets hit their lowest level in almost the last four weeks over debt related concerns in countries like Spain.
The market breadth was negative. On the BSE, 1,795 stocks declined while 991 advanced. All the sectoral indices closed in the red led by a steep fall in metals (-3.35 percent), realty (-2.87 percent) and power (-2.7 percent).
In the 30-share Sensex pack, 28 stock declined led by a steep five percent fall in Maruti as its Manesar plant remained shut after last week's violent clash between managers and workers. Sterlite Inds also fell by five percent.
The fall in the markets could be attributed to the crash in European markets. France's CAC, Germany's DAX and Britain's FTSE dropped 1.7-2%. Athex Composite Share Price Index crashed over 6%.
"Indian markets opened lower on weak global cues and slid further to end near day lows. The markets lost about 1.7% on concerns that, Spain might become the fourth euro zone member to need a full international bailout after a second region Murcia (after Valentia) indicated that they might need government help. There were also concerns that, there may be resistance to FDI in retail. This may mean that, the government may face further roadblocks to economic reform agenda.
With below-normal monsoons till date and elevated crude prices, RBI may not cut rates in its next meeting on July 31. Thus, markets are hoping for the re-initiation of the reform initiatives by the Government, which may lend support to the stock prices." said Dipen Shah, Head of PCG (Private Client Group) Research, Kotak Securities
Stock specific news:
•Coromandel International declined by 2.75 percent after its consolidated net profit fell almost 28 percent for the June 2012 quarter.
•Colgate Palmolive closed up marginally by 0.54 percent after it posted a 17 percent gain in net profit to Rs 117.4 crore for the June 2012 quarter.
•Indian Bank gained 3.3 percent after net profit rose 13.47 percent to Rs 461 crore.