Markets end sharply lower ahead of expiry; telecom, power dip

26 May 2009

The markets ended sharply lower, after seeing consolidation in the last two-and-a-half sessions. A correction was due as the markets had run up quite significantly in a short span of time and were trading way above valuations.

Heavyweights witnessed huge selling pressure ahead of F&O expiry on Thursday, which dragged the Nifty below the 4100 mark and the Sensex below the 13600 level during the day. The NSE advance:decline ratio declined in favour of declines to 1:2 from 10:1 in the morning.

Profit booking was seen in telecom, power, oil & gas, banking, realty, metal and capital goods while select technology stocks witnessed buying interest due to weakening rupee.

The 50-share NSE Nifty touched an intraday low of 4092.25, before closing the day at 4116.70, down 2.85% or 120.85 points. The 30-share BSE Sensex shed 323.99 points or 2.33%, to settle at 13,589.23.

Marc Faber, Editor and Publisher of The Gloom, Boom & Doom Report, said he saw a correction of 25-30% in equities and that he expected the Sensex to retest 10000-12000 levels. ''Markets will correct as it becomes evident that the economic recovery is not as rapid as expected.''

Among the frontliners, NTPC, Bharti, Reliance Communication, ICICI Bank, Power Grid, SAIL, L&T, DLF, Reliance Power, Reliance Capital, Tata Communication, Tata Motors, Ranbaxy, ABB and BPCL fell 4-9.5%. Reliance Industries, ONGC, ITC, SBI and HDFC Bank fell 2-3%.