BSE Sensex ends 135 lower; banks, autos drag

Indian equities recovered from their day's low to end a terrible day of trade on a not-so terrible note. Investors were jilted by the Eurozone's decision to force depositors in Cyprus to contribute towards a bailout that sparked concerns of contagion. Nervousness was also seen ahead of the Reserve Bank of India's monetary policy review on March 19.

The Sensex ended the day at 19293.20 down 134.36 points while the Nifty slipped 37.35 points at 5835.25.

Rate sensitives like auto and banks dragged throughout the day. Shedding over 1 percent each, HDFC, ICICI Bank, Axis Bank and Kotak Mahindra were biggest losers among the banking stocks. Banking stocks were still reeling under Cobrapost money laundering expose. The RBI has sent its teams into branches named in the sting operation, reports CNBC-TV18 quoting sources . It is learnt that 30 teams of the banking watchdog have moved in last week after the sting operation sent shockwaves across the banking industry.

Most of the auto stocks including Bajaj Auto (down 2.1 percent), Maruti Suzuki (down 2.1 percent), Tata Motors (down 1.5 percent) and  M&M (down 1.6 percent) were battered on the bourses.

BSE Metals indices skid 2.4 percent as stocks like Coal India (5.4 percent), NMDC (down 4.5 percent) and Tata Steel (1.5 percent) were in deep red.

However, defensives like FMCG and pharma lend support to the market. Top gainers on the BSE Sensex were Cipla, HUL and HDFC Bank with a marginal gain of around 1 percent each.

Shares of SKS Microfinance rallied nearly 3.3 percent after the Supreme Court asked Andhra government not to take coercive steps against the company. NW18 reported that SKS Microfinance approached Supreme Court against Andhra government's Microfinance Law.

SREI Infrastructure Finance was up 4.4 percent while GMR Infra gained 4.4 percent.

The market is expecting the RBI to cut rates by 25 basis points in its monetary policy review on March 19. Analyst PN Vijay says that a rate cut is already de-factored in the market. " I would say that it has not been factored in too much. In other words if CRR also gets cut I could see a pretty sharp move up in bank stocks," he adds.

The market recovered from the day's low in late afternoon trade but sell-off continued in most of the sectors. The Sensex was down 124.09 points at 19303.47 and the Nifty slipped 36.20 points at 5836.40.

RBI monetary policy action on March 19 seemed to be guiding sentiments now as banks were somewhat lending support. Finance Minister P Chidambaram also said that there is a case for the RBI to cut policy rates, and the central bank should take comfort from the government's efforts to cut the fiscal deficit.

Among the banking stocks HDFC Bank was up  2.2 percent while Bank of Baroda gained 1.4 percent.

Top gainers on the Sensex were Cipla, HDFC Bank, HUL, Hero MotoCorp and Hindalco.

Meanwhile, Coal India, Tata Power, GAIL, Maruti Suzuki and ICICI Bank dragged as investors were busy off-loading shares during the day.

Jet Airways tumbled 3.7 percent after sources indicated that the Jet-Etihad deal may be called off. It is learnt that Etihad board is likely to meet on March  22 to take a final call. The Jet promoters have reportedly refused to give in to Etihad's demand of management control.

Engineers India tanked 4.52 percent as according to media reports, the company is planning to terminate the Rs 300 crore pipeline contract awarded to Fernas Construction for IOC's Paradip refinery. In addition EIL has also recommended the cancellation of the Rs 1800 crore contract awarded to Fernas for Dahej petrochemical complex of ONGC petro additions.

Heavy selling pressure was felt in afternoon trade as the Nifty drifted closer to 5800 led by fall in rate sensitives and commodities. The Sensex crashed 175.59 points or at 19251.97 while the Nifty plunged 50.50 points at 5822.10. However, defensives like FMCG and pharma were lending support to the otherwise feeble market.

Broader markets too were under pressure, weighed down by infra and financial names. BSE Midcap was down 0.6 percent but Amtek India gained 11 percent. Among the largecap auto stocks, Maruti Suzuki fell 2.6 percent while Bajaj Auto, M&M and Tata Motors were down around 1.5 percent each.

Top losers on the BSE Sensex included Coal India (down 5.7 percent) while GAIL, Sterlite, Tata Power and ICICI Bank skided more than 2.5 percent each. On the gaining side were stocks like HUL, Cipla and Sun Pharma.

Thomas Cook was buzzing after market regulator SEBI approved the issuance of over 3 crore shares or nearly 14 percent stake through the institutional placement programme (IPP) for the company. The stock was up 2.7 percent.

Equity benchmarks remained deep in the red as Cyprus jitters continue to unnerve investors. The Sensex lost 155.09 points at 19272.47, while Nifty fell 43.75 points or at 5828.85. Coal India remained the biggest index loser, trading with a massive 5.63 percent cut, while private lenders ICICI Bank and Axis wiped out 2.7 percent and 2.5 percent respectively. Bharti Airtel, Sterlite and Tata Power fell around 2.6 percent each.

Sugar stocks were bucking the trend. Shree Renuka (up 1.7 percent), Bajaj Hindusthan (up 2.5 percent) and Balrampur Chini (up 1.4 percent) were higher as news reports suggest that government may consider partial sugar decontrol as early as today. It is expected to discuss the much awaited measure to abolish the levy sugar mechanism under which private millers are required to sell a specific amount of sugar to the government at concessional rates. However, additional excise might have to be imposed on sugar to offset the increased subsidy burden.

Oil and gas stocks were also on seller's list as the companies did not hike diesel prices on Friday, contrary to expectations of a monthly hike. Edelweiss believes ONGC (down 1 percent), Oil India (down 2.1 percent) and OMC's are impacted due to this news and the lack of a diesel price hike was triggered by the political pressure due to the ongoing parliament pressure , though do not rule out resumption of increase in diesel prices after the parliament takes a recess.

Metal indices were down 2.5 percent. JSW Steel fell 1.5% as the company has put on hold the expansion plans of its Vijaynagar plant , which has 10 mn tonnes capacity. Expansion plans have been put on hold due to current iron ore shortage. The company had plans to expand its capacity by 2 mn tonnes, taking the total capacity to 12 mt per annum.

Reliance Communication sank 3.3 percent as department of telecom (DoT) issued one time excess spectrum charge on CDMA. DoT had issued a notice on GSM operators too for one time fee on excess spectrum, but telecom companies opposed it.

The market opened on a weak note as a sudden shock from Cyprus rattled investors' nerves across globe. Banks in Cyprus have decided to impose a levy on depositors amid wide protests, which led to a fear of contagion across the financial system in Europe. Benchmark indices reacted to the news, following its Asian peers. The Sensex lost 159.36 points at 19268.20 while the Nifty fell 47.15 points or 0.80% at 5825.45.

Biggest losers on the Sensex were Coal India (down 4.3 percent), Bharti Airtel (down 2.3 percent) and Hindalco (down 1.9 percent).

Investors of Coal India were reacting negatively to government's plan to divest 10 percent in the company. The government hopes to mop up Rs 20,000 crore helping to reach atleast half of the divestment target of Rs 40,000 crore in FY 14.

Bharti Airtel is likely to face another show cause notice for sharing its 3G airwaves with Vodafone and Idea, telecom department officials said.

Oil and gas (index down 1.1 percent) along with rate sensitive like BSE Bankex (down 1.2 percent) and BSE Realty (down 1.6 percent) were on the downside. Investors seem to be cautious ahead of the Reserve Bank of India's mid-quarter monetary policy on March 19.

Among the banking stocks, ICICI Bank (down 1.8 percent), Axis Bank (down 2.8 percent) and HDFC Bank (down 0.8 percent) were still reeling under the money laundering expose.

Meanwhile, FMCG and technology stocks seemed to be supporting the market. On the gainers side were HUL (up 1 percent), Sun Pharma and Cipla.