Sensex slumps 255 points; Cipla sinks on Q3

NDTV Profit Desk

13 Feb 2014, 05:13 PM IST

The BSE Sensex fell more than 1 per cent on Thursday to post its biggest drop in one-and-a-half weeks as Cipla and Coal India slumped following disappointing earnings, while other blue chips tracked weaker global markets.

The market ended weaker, snapping two days of gains that had left indexes at their highest close of the month in the previous session, even after data late on Wednesday showed consumer inflation slowing more than expected to a two-year low in January.

Traders said the data was welcome and would likely raise expectations that the Reserve Bank of India will leave interest rates on hold at its April 1 policy review, but pointed to reasons for caution.

Lingering uncertainty about the global economy is keeping shares worldwide under pressure. Although foreign institutional investors bought shares worth Rs 212 crore on Wednesday, they have been heavy sellers since late January.

India is also due to release wholesale price inflation numbers for January on Friday, while the finance minister is due to present the government's interim budget on Monday, ahead of elections due by May.

"Our markets are waiting for a correction. As of now, there are no triggers left for our markets. Our earnings season is going to end and expectations of a stable government are still several months away," said Mehraboon Irani, head, private client group at Nirmal Bang.

"Any fall in global equities will have a major impact on our markets."

The BSE Sensex closed 1.25 per cent lower at 20,193.35, posting its biggest daily percentage fall since February 3 after gaining 0.6 per cent over the previous two sessions.

The Nifty fell 1.36 per cent after gaining 0.5 per cent over the previous two sessions.

Shares of Cipla slumped 7.86 per cent, their biggest single-day fall since May 2009, as worries about high costs on the drugmaker's profit margins triggered stock rating downgrades by some brokerages.

Coal India, the world's largest coal miner by output, fell 3.52 per cent after reporting its third straight decline in quarterly profit on Wednesday, on softer prices at coal auctions and lower sales volumes.

Energy stocks such as Reliance Industries fell 1.28 per cent and Oil and Natural Gas Corporation lost 3.39 per cent as investors took profit after Wednesday's gains.

Banking stocks such as HDFC Bank fell 2.01 per cent and ICICI Bank dropped 1.56 per cent, with some traders citing some disappointment that core consumer price inflation in January remained at 8 per cent, similar to December.

However, shares in Credit Analysis and Research closed 4.3 per cent higher after rising as much as 6 per cent, after the company said its major shareholders are exploring a share sale.