Sensex ends down 167 points, after crashing over 600 pts in initial trades

Domestic equity markets ended off their intra-day lows as late bout of shortcovering in select FMCG and frontline stocks helped the benchmark Sensex erase most of its early losses after a weak opening had snow-balled into a full-blown sell-off in the first half amid the lingering Greece debt crisis. Vary of Greece defaulting on its loans and may eventually face exit from Euro zone, investors shunned stocks at will, much in sync with the trend seen in other Asian and European indices, resulting in the index plunging to the day’s low of 27,209.19, down 603 points from previous close. [caption id=“attachment_2317758” align=“alignleft” width=“380”]  Reuters[/caption] But equity markets came off lows as the trading progressed and the index advanced to the day’s high of 27,695.32, still down 117 points from previous close, as confidence-boosting comments from several market experts indicating that the ongoing debt crisis will not have major impact on local equities helped stem the fall. The 30-share BSE S&P CNX Sensex finally ended the session at 27,645.15, down 166.69 points or 0.6 percent from previous close. The broader 50-share CNX Nifty closed at 8,318.40, down 62.70 points, or 0.7 percent. Among the global markets, other key peer Asian indices such as Nikkei and Hang Seng ended nearly 2-3 percent lower, while European gauges such as FTSE, DAX and CAC had crashed around 2-3.6 percent in their early trades. Market breadth ended weak with 1,809 stocks declining against 868 scrips advancing on BSE. “Last whole week Global Markets were expecting Greece and EU to arrive at a mutually acceptable solution. Weekend announcement of Referendum has created uncertainty. Street is more worried about the contagion effect on other countries like Portugal, Spain and Italy. Compulsions and common interest of Greece and EU will ensure that there will be many swings in the saga keeping the Safe heaven like German and Swiss Bonds in demand, Euro under pressure and Global Equity Markets volatile,” said Nilesh Shah, MD at Kotak Mutual Fund. From India point of view, our markets will witness little lower volatility than Peers as we are least impacted from the unfolding events in Greece and EU, added Shah. Among the laggards dragging the markets, shares of Hindalco dropped 3.5 percent to Rs 112.80, SBI fell 2.1 percent to Rs 259.55, Sun Pharma declined 2 percent to Rs 849.65 and Maruti Suzuki was down 1.9 percent at Rs 3,994.95. Others such as Tata Motors, Infosys, Bharti Airtel, ONGC, BHEL, Wipro and Vedanta were down 1-2 percent. However, Hindustan Unilever gained 2.1 percent to Rs 905, NTPC gained 0.8 percent to Rs 138.75 and ITC was up 0.5 percent at Rs 310.15. Shares of L&T, HDFC, Bajaj Auto and ICICI Bank also ended higher after incurring losses in early trades. Despite last-minute buying in select heavyweights, risk-averse investors were harsh on mid and small-cap stocks with BSE mid-cap and small-cap indices ending 1.4 percent and 1.5 percent lower, respectively.