Sensex ends below 20K on profit booking

The rally on benchmark Nifty paused on Wednesday on the back of profit booking and weak European cues. Both indices closed below their psychologically important levels – Nifty below 6000 and Sensex below 20000 mark. The index witnessed consolidation throughout the session after rallying sharply since last 10 out of 11 sessions.

Commenting on the road ahead for markets, C Jayaram, ED at Kotak Mahindra Bank said, the sectors that had a very sharp run up could probably see some bit of correction. However, he does not see a scenario of a meltdown happening. "Maybe we will see a correction or maybe we could have individual stocks available at 10-15-20% lower. That could be a good opportunity to buy on declines again."

Vivek Mavani, Vice President and Senior Portfolio Manager at Brics Securities also expects the markets to correct 5-7%. However, he believed individual stocks may decline 10%-20%, which could be used as a buying opportunity.

Capital goods, telecom, realty, oil & gas, private power and select technology companies' shares dragged the indices lower today. Even weak European cues weighed on markets; France's CAC, Germany's DAX and Britain's FTSE went down 0.5-0.9% at the time of closing of Indian equities.

However, FMCG, select financial and metal companies' shares along with Maruti, Wipro, NTPC, Tata Power and Hero Honda were on buyers' radar, which capped the losses to major extent.

The 30-share BSE Sensex closed at 19,941.72, down 59.83 points or 0.30% and 50-share NSE Nifty fell 0.30% or 18.05 points to 5991. However, the premium on Nifty futures trimmed down; the Nifty September futures ended at 2.2 points premium and October futures at 17 points premium, as per provisional data.