After 3-day rally, Sensex ends 300 points lower, banks biggest losers

Indian markets ended a volatile session in red today as investors booked profits after a strong three-day rally.

While the BSE Sensex ended 303 points or 1.22 percent lower at 20635, the NSE Nifty ended 80 points or 1.3 percent lower at 6122. The markets today marked their single biggest percentage drop since 30 percent.

Lenders, which were among the biggest recent gainers, retreated.

BSE banking index closed down 2.4 percent, while consumer durables index was down 1.6 percent.

Top Nifty losers - ICICI closed down 3.6 percent, JP Associates was down 3.5 percent and BPCL closed down 3 percent.

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Top Sensex losers were Bharti, Hindalco, ICICI, Maruti down 2.2 percent.

“The market is pinning hopes on a BJP win and if the results are below expectations, equity markets won’t see a steep downside. The bigger deterrents for the market are QE tapering and inflation,” said Gautam Trivedi, Managing Director, Religare Capital in an interview with CNBC-TV18 .

Investors, both domestically and globally are waiting to see what the mood was at the most recent meetings of the US Federal Reserve and the Bank of England.

European shares fell for a second straight day, then stabilised. Overnight losses on Wall Street and in Asia, along with concerns about company earnings, kept investors cautious.

Focus is largely on global events later in the day. The Bank of England will publish minutes of its recent meeting at 0930 GMT. Then come U.S. retail sales data and eagerly awaited October minutes from the Fed.

Fed Chairman Ben Bernanke set the tone on Tuesday when he said the US central bank will keep monetary policy ultra-easy as long as needed.

“It confirms our view that the Fed will be extremely careful in taking away accommodative monetary policy and that tapering will begin by March at the earliest,” said Elwin de Groot, an economist and strategist at Rabobank.

“Even though it feels like things may not go further, this policy will simply sustain it. And it is difficult to fight against it, so we could see a further narrowing of spreads and riskier asset prices going higher.”

In another closely watched move, the Chinese central bank set the yuan’s mid-point for Wednesday trading at 6.1305 per dollar, its highest since the landmark revaluation in 2005.

With inputs from Reuters