Nifty closes below 4250; commodities, telecom drag

22 June 2009

The benchmark indices retreated after Friday's gain. This fall could be attributed to drop in commodities prices in international markets and weak global cues. The sell-off in oil & gas, metal, cement, realty, telecom, power and select banking stocks pushed the Nifty below the 4250 mark.

The markets had started on a positive note but after an hour of trade, both indices turned volatile with negative bias. They lost ground further in the last one hour of trade. The 50-share NSE Nifty closed at 4235.25, down 1.82% or 78.35 points, after seeing a day's low of 4221.90. The 30-share BSE Sensex has touched an intraday low of 14,269.77, before closing at 14,326.22, down 195.67 points or 1.35%.

Deven Choksey of KR Choksey Securities said after having such a good run up probably we had to have some amount of correction and that too before an important event like Budget. So this shakeout has happened largely from that perspective."

"4,150 on the downside, if it breaks below 4,200 levels, would be a good possibility otherwise on 4,450, it is meeting a resistance. One should trade this range till we have the Budget and full clarity coming back into the markets."

Big heavyweight Reliance Industries fell another 4%, after losing over 13% in last week, as Bombay HC gave decision against the company in RIL-RNRL gas case. Choksey said, "Reliance is going to drag the market till the time Supreme Court (SC) gives complete clarity on its judgement and I think that is an area which we are going to be carefully hereafter in coming days and months."

Among the broader indices, the BSE Midcap Index lost 28.22 points or 0.57%, to 4,930.51 and the Smallcap Index fell 0.33% or 18.39 points, to settle at 5,599.57.