ADVERTISEMENT

Sensex falls 252 points to end below 21,000

The BSE Sensex fell more than 1 per cent 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, in a weak start to 2014.

Combined with Wednesday's fall, the benchmark Sensex is down 1.3 per cent over the first two trading sessions of the year, after gaining 8.9 per cent last year on the back of strong foreign buying.

Fall on Thursday was accentuated by weaker European and Asian shares after disappointing manufacturing data from China.

Shares have started the year with caution ahead of upcoming quarterly earnings, with analysts also keenly awaiting inflation data due mid-month that will help determine whether the Reserve Bank of India raises interest rates at the end of January.

Any rate hikes could further undermine confidence in economic growth. Data on Thursday showed the HSBC Manufacturing Purchasing Managers' Index (PMI), compiled by Markit, fell to 50.7 in December from 51.3 in the previous month, reflecting softness in new domestic orders.

"Earnings would be more important from equity market's perspective as market has discounted some cooling off in inflation. We are expecting some positive surprises in October-December results," said Sudip Bandyopadhyay, managing director at Destimoney Securities Pvt Ltd.

The benchmark Sensex fell 1.19 per cent, or 252.15 points, to end at 20,888.33, erasing earlier gains of as much as 0.9 per cent.

The Nifty lost 1.28 per cent, or 80.50 points, to end at 6,221.15, posting its lowest close since December 19.

Both indexes marked their biggest single day fall since Nov 21.

ICICI Bank fell 2 per cent after earlier rising as much as 1.9 per cent, while Axis Bank lost 1.5 per cent.

Among non-banking lenders, IDFC lost 4.7 per cent, erasing earlier gains of 1.5 per cent, while Housing Development Finance Corp ended 0.3 per cent lower.

In other blue chip shares, Larsen and Toubro fell 3 per cent, while ITC ended lower 2.3 per cent.

However among stocks that gained, midcap state-owned banks, including Corporation Bank, rose as dealers cited attractive valuations compared with larger private sector rivals.

Corporation Bank and Indian Bank ended up 0.5 per cent each.

Copyright Thomson Reuters 2013