Sensex closes over 250 points down, falls most in 1-1/2 months

The BSE Sensex fell more than 1 percent on Thursday, posting its biggest single-day percentage fall in nearly 1-1/2 months as profit-booking hit blue chips such as ICICI Bank for a second consecutive day.

ICICI Bank provisionally fell 2.2 percent after earlier rising as much as 1.8 percent, while IDFC slumped 4.8 percent erasing earlier gains of 1.5 percent.

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The Sensex provisionally fell 1.31 percent after earlier gaining as much as 0.9 percent, while the Nifty ended 1.28 percent lower, marking their biggest single-day fall since November 21.

But according to Michael Kurtz, Chief Asia Equity Strategist at Nomura, the market is over its “taper” fear. Although, he agrees that taper talk will dominate investor sentiment in the near-term, he said the markets are better prepared for Fed cutting down on its bond-buying programme.

“We do not see tapering creating much panic in the market,” he told CNBC-TV18 in an interview.

Nomura is overweight on India on anticipating reform-friendly politics and commodity price relief. Kurtz says India, which has historically traded at higher multiples, has the potential to grow in the range of 15.5-16.5 times.

Meanwhile, brokerage CLSA expects the Sensex to touch 23,500 by the end of this calendar, and expects investors to make money in cyclical stocks like power utilities and midcap realty firms.

Stocks which CLSA is bullish on include Axis Bank , ICICI Bank , Maruti , UltraTech , ITC , Lupin and Zee . The brokerage sees earnings being flat in this financial year, but growing around 15 percent in FY15.

With inputs from Reuters