After plunging sharply in early trades on Tuesday, following the Reserve Bank of India's move to tighten liquidity inthe banking system to arrest the rupee's slide against the greenback, the Indian stock market staged a recovery of sorts, but failed to move up anywhere near the unchanged line, as investors kept selling stocks amid worries about slowing growth.
As stocks tumbled in opening trades - those from banking and realty sectors led the slide - the BSE benchmark Sensex plummeted nearly 400 points to 19,649.58 in a flash and the Nifty declined by 120 points to 5910.95.
Even as stocks from automobile and healthcare sectors regained some lost ground, and key issues from information technology and power sectors edged higher, FMCG and oil stocks turned in a fairly strong performance. Besides realty, bank and capital goods stocks, several stocks from the metal space ended sharply lower.
The Sensex finally ended at 19,851.23 with a loss of 183.25 points or 0.91%. The Nifty closed at 5955.25, recording a loss of 75.55 points or 1.25%.
ICICI Bank ended 5.6% down. State Bank of India lost around 4.5%, while HDFC Bank, the other banking sector heavyweight in the Sensex, closed with a loss of 2.3%.
Metal stocks Jindal Steel & Power (down 3.2%), Sterlite Industries (down 3.2%), Tata Steel (down 2.2%), Hindalco (down 1.7%) declined sharply.
HDFC ended 3.8% down. Larsen & Toubro, Dr Reddy's Laboratories, Maruti Suzuki, Hero Motocorp, BHEL, Wipro, Mahindra & Mahindra and Cipla lost 1.4% - 3.5%. Infosys declined marginally.
DLF, IndusInd Bank, Jaiprakash Associates and IDFC lost 7% - 8%. Axis Bank, Punjab National Bank, Kotak Bank, Bank of Baroda and Reliance Infrastructure ended lower by 3.5% - 6.2%. Sesa Goa and NMDC also declined sharply.
FMCG heavyweights ITC and Hindustan Unilever gained 2.3% and 1.6%, respectively. Telecom stock Bharti Airtel moved up by a little over 2%. ONGC, NTPC, Sun Pharmaceutical Industries, Tata Motors, Tata Power, Reliance Industries, GAIL India, Coal India and Tata Consultancy Services gaind 0.5% - 1.3%. BPCL, Ambuja Cements, ACC and Asian Paints also ended higher.
Neyveli Lignite Corporation ended 4.4% up following the market regulator SEBI approving Tamil Nadu government-run companies to buy the central government's 3.56% stake in the company. Crompton Greaves gained nearly 2.5% on commencement of the company's share buy-back programme.
Biocon gained nearly 4%. Siemens, Godrej Consumer Products, Castrol India, Idea Cellular, Nestle India and Marico climbed 2% - 2.5%.
Yes Bank, Indiabulls Real Estate, IRB Infrastructure, Oriental Bank of Commerce, Canara Bank, Power Finance Corporation, Uco Bank, Oberoi Realty, LIC Housing Finance, HDIL, Union Bank of India and Unitech lost 6% - 10%.
The market breadth was weak. Out of 2432 stocks traded on BSE, 1421 stocks declined. 873 stocks moved up and 138 stocks ended flat.
On Monday, the central bank announced that the marginal standing facility rate is re-calibrated with immediate effect to be 300 basis points above the repo rate. The bank said overall allocation of funds under the Liquidity Adjustment Facility will now be limited to 1% of the Net Demand and Time Liabilities of the banking system.
The apex bank also said that it will conduct open market sales of Government securities of Rs 12,000 crore on Thursday (18 July 2013), and that it will continue to monitor the markets, liquidity situation and macroeconomic developments and take measures to bring in economic stability.