Nifty ends below 8850, Sensex tanks 499 pts; ICICI falls 5%

Moneycontrol Bureau

The 10-day market rally has come to a grinding halt as volatility continued to haunt Dalal Street. The markets hit new records in early trade with the Nifty almost touching the 9000-mark but then took a turn to end with sharp losses as corporate earnings of PSU banks spooked investors.

The 50-share index ended first day of February F&O series at 8808.90, down 143.45 points or 1.6 percent. The Sensex which was within striking distance of the 30,000 mark tanked nearly 500 points. The Sensex slumped 498.82 points or 1.7 percent at 29182.95. About 1258 shares have advanced, 1609 shares declined, and 246 shares were unchanged.

The market is technically overbought and unlikely to rise much in the near term, feels Sanjay Dutt of Quantum Securities. He expects liquidity flows to be strong, but the supply of share offerings is expected to cap market gains.

Kunal Saraogi, CEO, Equityrush believes market is heading into a choppy session and may move somewhere around 8700 over the next few days.

Gainers & losers

In a big boost for the Modi government’s divestment drive, the Coal India offer-for-sale (OFS) has already been fully subscribed. The OFS comprises a divestment of 5 percent stake in the company, with a green-shoe option of an additional 5 percent. The government had set Rs 358 per share as the floor price which could turn out to be India’s largest capital market issue to date.

Coal India ended the day with 4 percent loss.

Banking major ICICI Bank took a big knock in trade today on the back of disappointing December quarter earnings. While net interest income and net profit were marginally below estimates, spike in bad loans and high provisions took their toll on the stock. It fell 5 percent in trade today.

Bank of Baroda's December quarter asset quality also takes a significant knock. Dragged by PSU banks, the Bank Nifty fell 3.4 percent while Bank of Baroda (down 11 percent), SBI, PNB and HDFC were top losers in the Nifty.

Meanwhile Tata Power (up 4 percent), BHEL, NTPC, Sesa Sterlite and Wipro were top gainers in the Sensex.

Only the IT and Realty index ended in green today. Boosted by bumper December quarter results, HCL Tech beat street with dollar revenue jumping 4 percent sequentially and net profit up 2.3 percent.

Tech Mahindra also reported better-than-expected December quarter results. Consolidated profit jumped 11.9 percent sequentially to Rs 805 crore during Octber-December quarter.

Shares of realty companies were up as residential property prices seem to be on an uptrend. Consultancy firm Knight Frank has said that that despite sluggish demand seen in residential property markets over the last year, residential property prices are going higher.

Meanwhile, SpiceJet also saw a gain of 2 percent as Kalanithi Maran and Kal Airways plan to sell their entire equity to its new promoter Ajay Singh. The low-cost airline plans to allot 37 lakh non-convertible preference shares to Marans and Kal Airways. These shares will be issued at Rs 1000 per share. SpiceJet also plans to raise up to Rs 1,500 crore through issues of various securities.