Sensex plunges 400 points on profit taking, trade deficit
The BSE Sensex plunged 400 points, while the 50-share Nifty slipped below the key 6,000 mark on Monday after data showed April's trade deficit widened to $17.8 billion.
Gold and silver imports were up by 138 per cent to $7.5 billion last month compared to a year earlier, as retail consumers in the world's biggest gold importer went on a buying spree after global prices fell.
Traders attributed the sharp cut to profit taking after the Sensex and Nifty closed at their 28-month high last week. Market analyst Sarvendra Srivastava said the correction was warranted as the up move was very fast.
Mr Srivastava said the bullish trend remains intact and a reversal is likely only when the Nifty closes below 5,920-5,930 mark.
As of 2.15 p.m., the Sensex traded 395 points or 2 per cent lower at 19,747, while the Nifty was down 109 points to 5,999. The rupee slipped to 54.98 to the dollar.
Mr Srivastava said if the rupee breaks 55 or 55.20, there might be some trouble for stocks.
The largest cut was witnessed in FMCG stocks, with tobacco major ITC falling 5.5 per cent. ITC saw profit booking after gaining 7.7 per cent in May, as of Saturday's close, and marking its all-time highest close in the previous session.
Capital goods, IT and banking were also hit. 49 of the 50 stocks traded lower on the Nifty. Asian Paints was the sole gainer, trading 0.5 per cent higher.
