After opening on a firm note on the back of the government's decision to allow 49% FDI in insurance sector and to open up FDI in the pension sector as well, equities drifted lower on the Indian bourses with investors switching over to the selling mode, choosing to take some profits after recent sharp gains.
As stocks tumbled, the key indices Sensex and Nifty plunged sharply - the latter went crashing down by over 900 points and triggered the lower circuit following some erroneous orders - and despite a fairly strong recovery in late afternoon trade thanks to a firm trend in European markets, ended the session with notable losses.
The Sensex, which declined to 18,757.34, losing over 300 points in the process, ended the day with a loss of 119.69 points or 0.63% at 18,938.46. The Nifty, which faltered to 4888.20 following some freak orders, closed at 5746.95, recording a loss of 40.65 points or 0.7%.
Information technology stocks declined with a strong rupee prompting investors to press sales in that space. Healthcare and bank stocks were among the other prominent losers.
Metal, power, realty and oil stocks came back strongly after a sharp setback and a few of these even managed to sign off on a positive note. Capital goods, automobile and FMCG stocks found good support in afternoon trade and mostly closed higher. Select consumer durables stocks moved up.
Midcap and smallcap stocks too recovered after a sharp setback. Still, the BSE Midcap and Smallcap indices ended lower by around 0.8% and 0.9%, respectively.
HDFC ended 4.8% down following a sell-off by Carlyle, which holds a stake worth US$850 million in the company. Sun Pharmaceutical Industries and Wipro closed lower by around 2.4% and Infosys ended with a loss of 1.8%.
ICICI Bank, Dr Reddy's Laboratories, HDFC Bank, Bharti Airtel, Hero Motocorp and BHEL lost 1% - 1.6%. Tata Consultancy Services, Sterlite Industries, Bajaj Auto and Cipla also closed on a weak note.
Reliance Infrastructure, Jaiprakash Associates, IDFC, HCL Technologies, Lupin, Asian Paints, Sesa Goa, Punjab National Bank, ACC, Ranbaxy Laboratories and Grasim Industries all lost 1% - 2.8%.
Tata Motors ended stronger by about 2.7%. Hindustan Unilever moved up by 1.7% and Mahindra & Mahindra gained 1.3%. Hindalco, ONGC, Larsen & Toubro, Reliance Industries, DLF, Coal India, Siemens and Tata Steel also ended on a positive note.
Shree Cement, Rashtriya Chemicals & Fertilizers, Bajaj Finserv, Aurobindo Pharma, Central Bank of India , Adani Power, Oberoi Realty, NMDC, Sun TV Network, Divi's Laboratories, Dish TV India, Bosch, Godrej Industries, Bank of India, Indian Hotels and Gujarat Minerals were among the prominent losers in BSE 'A' Group.
Essar Oil shot up by over 15%. Indiabulls Real Estate, Crompton Greaves, Gitanjali Gems, Adani Enterprises, Mangalore Refineries & Petrochemicals, Castrol India, Thermax, L&T Finance Holdings, United Breweries, Dabur India, REC and Opto Circuits posted strong gains.
The market breadth was weak. Out of 2996 stocks traded on BSE, 1786 stocks declined. 1076 stocks moved higher and 134 stocks ended flat.