Sensex plunges 450 points as dollar firms up; ITC leads FMCG slide

Key equity benchmarks plunged 2 percent Monday, the biggest single day fall in more than a year, with brokers attributing the crash to profit taking after the recent run up.

Signs of a recovery in the US economy also made investors jittery as they feel a portion of global liquidity flows could ease as the Federal Reserve starts tightening its monetary policy.

The BSE Sensex closed at 19691.67, down 430 points over the previous close. The Nifty closed at 5980.45, down 127 points over the previous close.

FMCG, metal and capital goods shares were the worst performers, as investors targeted stocks that had run up the most in the recent rally.

ITC topped the list of frontline losers, shedding over 5 percent. Sterlite, GAIL, BHEL, Larsen & Toubroa, Tata Motors, Bharti Airtel and Tata Steel were the other big losers, falling 3-4 percent.

Economic data released today was a mixed bag with consumer price index-based inflation easing for the second straight month, but trade deficit for April jumping due to higher gold imports.

''We believe this will be a challenging cycle and recovery in growth will be gradual. Moreover, the starting point of the macro stability environment (inflation, current account deficit and high banking sector loan deposit ratio) will still constrain domestic demand from staging a strong recovery,'' brokerage house Morgan Stanley said in its note to clients.

Sanjeev Prasad of Kotak Institutional Equities is advising clients to book profits in frontline stocks that have outperformed during the recent rally, as he feels valuations are stretched.

''I am not very sure whether just global liquidity can continue to rerate the stocks without any great change in their fundamentals. So, unless and until earning numbers start looking up I am not a big believer in chasing multiples just like that,'' he said in an interview to CNBC-TV18.

FIIs have been buying heavily over the last month, but experts feel the flows could reverse just as easily as they emerged.

The dollar index is up, the US arguably seems to be on the cusp of an economic recovery. So, some of these flows might reverse sometime sooner rather than later, especially in view of the recent run-up,'' said Dipen Sheth of HDFC Securities in an interview to CNBC-TV18.

Among midcap shares, Reliance Communications shares fell around 5 percent as investors were disappointed with the company's fourth quarter operational performance despite the growth in bottomline.

Elder Pharmaceutical shares crashed 10 percent with trading in the stock being frozen for want of sellers. The company today said that Ratnakar Bank had sold some of the shares pledged by the promoters with it.

Indian shares plummeted on Monday led by heavy selling in FMCG, capital goods, metal, IT and auto stocks despite positive regional shares. European and Nikkei shares were trading at five-year highs. The market is headed for its biggest intraday fall in 2013.

The Sensex was down 438 points or 2.18% at 19684, and the Nifty down 127 points or 2.09% at 5979. About 760 shares  advanced, 1487 shares declined, and 120 shares were unchanged.

Nifty has rallied more than 600 points or close to 12 percent in last one month and analysts believe that the current rally was driven by global liquidity and fundamentals were not supportive.

ITC was the biggest loser on key benchmark indices, down over 5 percent.

Laggards included Bharti Airtel, Reliance Infra, Ranbaxy Labs and BHEL, down over 2 percent each.

All 30 stocks comprising BSE Sensex were trading in red indicating the brutality of this fall.

India's April trade deficit surged to USD 17.8 billion on a massive jump in imports of cheaper gold. This will further increase concerns about the current account deficit.

Key losers in the broader markets were Nava Bharat Ventures, JK Cement, HMT, Elder Pharma, Sagar Cement, Reliance Media, Gati and Hindustan Media.

Heavy short positions were created in selective PSU banks after a big disappointment on the earnings front. 

Shares of jewellery manufacturers today gained up to 7.5 per cent in an otherwise weak stock market amid hopes of pick-up in sales of gold jewellery and coins on Akshaya Tritiya.

Thangamayil Jewellers soared by 7.49 per cent, Tribhovandas Bhimji Zaveri (3.19 per cent), Tara Jewels (3 percent), Titan Industries (1.24 per cent), Rajesh Exports (1.84 per cent), Shree Ganesh Jewellers (1.84 per cent).

The rupee on Monday lost 19 paise to hit a fresh over one-month low at 54.99 against the dollar on weakness in local shares and strong dollar.

Key equity benchmarks lost over a percent each despite a 13-month low April CPI figure. India's annual consumer price inflation slowed for the second straight month in April to 9.39 percent, government data showed on Monday. Consumer prices rose an annual 10.39 percent in March.

The Sensex was down 255 points or 1.27% at 19866 and the Nifty was down 75 points or 1.24% at 6031. About 815 shares advanced, 1346 shares declined, and 124 shares remain unchanged.

Key laggards in the Nifty were ITC, IndusInd Bank, Ranbaxy Labs, BHEL and GAIL, down between 2 to 4 percent.

Gainers included Dr Reddys Labs, Asian Paints, NTPC, Reliance Industries and HDFC Bank.

The rupee weakened to its lowest level in more than two months on Monday weighed down by weaker domestic shares and broad gains in the dollar against global currencies.

Dipen Sheth, Head-Institutional Research of HDFC Securities advices caution as the current market rally is only driven by global liquidity and the market trend could reverse anytime.

State-owned Bank of Baroda's (BoB) fourth quarter (January - March) net profit tanked more than 32 percent year-on-year to Rs 1,029 crore, dented by higher provisions that nearly doubled from Rs 844 crore to Rs 1,600 crore during the same period.  The net interest income or the difference between interest earned and paid out,  rose a little just by 1 percent to Rs 2,814 crore.

Profit booking seemed to be taking toll on the market as bulls look tired after the last week's spectacular run. Selling pressure in FMCG, capital goods and technology stocks have made the benchmark indices weak.

The Sensex was struggling to cling to 20,000 level and was down 122.68 points at 19999.64 while the Nifty slipped 32.65 points to 6074.60.

ITC (down 4.1 percent), BHEL, TCS, Tata Steel and L&T were the major losers in the Sensex.

Dena Bank slipped around 3 percent on weak March quarter results. Its net interest income was down 6 percent to Rs 562 crore, affected by an interest income reversal of Rs 62 crore. Pat slipped 51 percent to Rs 126 crore on higher provisions and higher operating expenses.

Reliance Communication fell around 2.6 percent

DLF was down 1 percent as the company announced issue of 8.18 cr share sale. Price band for share issue was fixed at Rs 222-233 per share. Floor price of Rs 222, is at 3.8 percent discount to current price.

Meanwhile, stocks which were gaining on the Sensex were Dr Reddy's Lab, RIL, HDFC Bank, ICICI Bank and NTPC.

India's annual consumer price inflation slowed for the second straight month in April to 9.39 percent, government data showed on Monday. Consumer prices rose an annual 10.39 percent in March.

The rupee was growing weaker in line with most Asian currencies, as the dollar's strength is the key theme in currency markets today.

Key equity benchmarks were trading weak ahead of the April Consumer Price Index (CPI) and monthly trade data today. Shares of FMCG, IT, telecom, capital goods and auto stocks witnessed selling pressure in the morning trade.

The Sensex was down 142 points or 0.71% at 19980 and the Nifty was down 38 points or 0.63% at 6068. About 770 shares advanced, 931 shares declined and 106 shares were unchanged.

Top gainers in the Nifty were Dr Reddys Labs, Asian Paints, Axis Bank, Jindal Steel and Cipla. Laggards included ITC, TCS, BHEL, Ranbaxy Labs and DLF, down over a percent each.

Dena Bank is down 4 percent after weak results. Net Interest Income (NII) was down 6 percent to Rs 562 crore, affected by an interest income reversal of Rs 62 crore. Net profit was also down significantly by 51 percent to Rs 126 crore on higher provisions and operating expenses. Asset quality too worsens with gross NPA up 10 percent and net NPA up 12 percent sequentially.

Reliance Communication slips 3.5 percent on profit taking after recent rally in the stock. The quarterly results were disappointing. Kotak says Q4 results were sideways as usual and they retain 'Sell' rating on the stock.

DLF was down 1.2 percent after the company announced issue of 8.18 crore shares sale tomorrow. The price band for share issue was fixed at Rs 222-233 per share. The floor price of Rs 222, is at discount to the current price.

MTNL gains 3 percent after reports indicate the group of ministers was charged with revitalizing the company.

Bank of india was trading weak ahead of its results. CNBC-TV18 poll expects NII growth of 3 percent to Rs 2588 crore and PAT de-growth of 8 percent at Rs 873 crore.

After the massive rally last week, the market seemed to take a breather today. The Sensex was down 101.42 points at 20020.90, and the Nifty fell 25.55 points at 6081.70. Investors are likely to watch out for the CPI inflation data to be released later in the day.

Amidst tepid trading, pharma stocks were seeing some buying interest with Dr Reddy's Lab (up 1.1 percent) as lead gainer in the Sensex. BHEL, Maruti Suzuki, HDFC Bank and Sterlite Industries were the other gainers.

Muthoot Finance gained 2.2 percent while MTNL surged 3.2 percent.

Meanwhile, FMCG stocks were facing heavy selling pressure with ITC and HUL topping the losers list.

HDFC, Bharti Airtel, NTPC, TCS and Tata Motors were the major losers in the Sensex.

Media stocks which rallied last week were knocking off gains on Monday morning.

Some companies that are expected to announce March quarter earnings today are Bank of India, BoB, Rel Power, Eicher Motors, Nestle, Tata Coffee, Titagarh Wagon and Zydus Wellness.