The Hindu Business Line : Fears of slowdown in FIIs inflow hurt Sensex

Trading highlights
Eight stocks declined for every one that advanced.
FIIs and the local broking community account for a large part of the sell off.

The Asian markets moved in sync with the overnight trend in the US markets. Concerns of a higher than expected inflation an interest rate hike in the US that could slow down flows into emerging markets appear to have caused a bearish sentiment in emerging markets.

Concerns of a CBDT circular on taxation of FIIs appear to have added fuel to the fire in the Indian markets.

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The Indian markets, which opened on a jittery note, were among the sharpest losers around the globe. The Sensex fell sharply by 827 points registering its largest drop in absolute terms in its history.

The other indices on the BSE also received a drubbing at the hands of the bears, who had a free rein of the markets.

The advances-declines ratio reflected the widespread bearish sentiment that prevailed in the markets. Among the sector oriented indices the metals index on the BSE was the largest loser with the index declining by more than 11 per cent.

FIIs along with the broking community appeared to have caused a large part of the selling pressure in the markets. The Indian public appeared to be the lone buyers in the markets. The bearish sentiment eroded wealth worth about Rs 2 lakh crore from the markets on Thursday.

Sector Watch

The metals sector was among the largest losers. Thursday's declines in this sector more than wiped out Wednesday's recovery; the BSE Metal index was back to the four-digit mark at 9,200.

Major losers in the metals sector included frontline stocks spanning both ferrous and non-ferrous industries. Stocks such as Sterlite Industries, Jindal Stainless, Hindalco, National Aluminium, Essar Steel, SAIL, Tata Steel and Sesa Goa declined by more than 10 per cent.

The consumer durables sector was yet another notable sector to under perform the bellwether indices. The white goods oriented index on the BSE shed about 300 points. Major losers in this sector included stocks such as Whirlpool, Hitachi, Titan Industries, Blue Dart and Videocon Appliances. Jewellery stocks such as Classic Diamonds, Suashish Diamonds and Su-raj Diamonds also shed significant value.

The cements sector was another prominent loser. Widespread declines were also registered in this sector with companies across sizes and locations closing in the red. ACC, which declined by about 12 per cent, was the largest loser among frontline stocks in the sector. Other prominent losers included stocks such as India Cements, Birla Corporation, Dalmia Cement, Prism Cement, Gujarat Ambuja and Prism Cement.

Plantation stocks, which had been holding their ground in the recent weeks, were subject to selling pressure. Williamson Tea Assam and McLeod Russel part of the B.M. Khaitan group were among the top losers in the tea industry. Other tea stocks that declined by more than eight per cent included Goodricke, Harrisons Malayalam and Bombay Burmah.

Prominent gainers

Despite the bearish sentiment that overflowed in the markets 288 stocks closed in the green. Prominent among them were Sun Pharmaceuticals and Flex Foods.