Domestic equity markets faltered once again after taking a breather on Tuesday, as lingering pain inflicted by weakening Chinese economy and subsequent nervousness across global markets continued to keep investors back home on the back-foot.
While a steep fall in Chinese and European stock markets kept the mood bearish for better part of trading session, local investors continued to lighten their equity portfolio ahead of tomorrow's futures & options expiry that led to a sharp intra-day gyration of nearly 500 points.
On Wednesday, the 30-share benchmark BSE S&P Sensex closed at 25,714.66, down 317.72 points, or 1.2 percent. After witnessing a roller-coaster ride in the first half, the index lost considerably towards the close to touch a low of 25,657.56, down 375 points. The broader 50-share CNX Nifty ended at 7,791.85, down 88.85 points, or 1.1 percent.
Market breadth ended marginally weak, with 1,346 stocks declining against 1,321 advances on BSE.
In Asia, Chinese markets ended in the red with Hang Seng ending 1.5 percent lower and Shanghai Composite index dropping 1.3 percent at close. On the other hand, Japan's Nikkei rebounded to end 3.2 percent lower. Key European inidices, too, buckled under selling pressure, falling over 1 percent each in mid-day trade.
Chinese central bank's booster shot in the form a rate cut announced yesterday to revitalise its slowing economy failed to lift the sentiment globally, as investors fear demand revival may not be soon on the cards. In its aggressive monetary easing stance, the People's Bank of China yesterday lowered one-year lending rate by 25 basis points to 4.6 percent and cut deposit rate by 25 basis points to 1.75 percent effective 26 August.
"Global factors continued to weigh on sentiment. Also, with derivatives expiry on Thursday, investors wound up their position. Overseas cues will dominate the direction of local markets for next few days. Any decision on GST front will be encouraging for the markets, which may give some confidence to the RBI to go ahead with a rate cut," said Dipen Shah, senior vice president at Kotak Securities.
Among the laggards in Sensex pack, shares of HDFC dropped 3.8 percent to Rs 1,102.45, HeroMoto Corp lost 3.4 percent to Rs 2,391.95, M&M declined 3.1 percent to Rs 1,215.30, SBI eased 3 percent to Rs 245.80, Bharti Airtel dipped 2.6 percent to Rs 339.75 and ONGC was down 2.5 percent at Rs 224.95.
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Updated Date: Aug 26, 2015 17:16:08 IST