Stocks went into a tail spin on the Indian bourses on Thursday, with investors going on a selling spree following a sell-off in Asian and European markets amid renewed worries about the global economy.
The U.S. markets ended notably lower on Wednesday amid doubts about further stimulus from the U.S. Federal Reserve. As if the lead was not weak enough, data showing a contraction in Chinese factory output added to the woes and sent stock prices tumbling on the Asian bourses. The Japanese benchmark Nikkei 225 was the biggest loser, going down by over 7%.
A heavy sell-off in key European markets and lower than expected quarterly results from State Bank of India took a heavy toll of stocks in afternoon trade and sent the benchmark indices Sensex and Nifty crashing down sharply.
While the Sensex ended the day with a loss of 387.91 points or 1.93% at 19,674.33, around 40 points off the day's low of 19,634.79, the Nifty closed at 5967.05, recording a loss of 127.45 points or 2.09%. The Nifty touched a low of 5955.70.
All the sectoral indices ended in the red. The BSE Realty index, which was the biggest loser, ended nearly 6% down. The Capital Goods index lost around 5.2%, BSE Power lost nearly 4% and the Bankex declined 2.8%.
Several stocks from oil, consumer durables, metal, automobile and healthcare sectors too ended notably lower. FMCG and inforamtion technology stocks found some support early on, but came off their highs later in the session. The BSE Midcap and Smallcap indices shed 1.9% and 2.2%, respectively.
Among Sensex stocks, only HDFC (0.55%) and Sun Pharmaceutical Industries (0.5%) managed to buck the weak trend. Tata Motors, Cipla and Hindustan Unilever, which closed lower on BSE, ended on the positive side on NSE. Gains, however, were just marginal.
State Bank of India ended nearly 8% down with investors pressing sales at the counter on lower than expected quarterly earnings. The bank posted a net profit of Rs 3299.22 crore for the quarter ended March 31, 2013 as compared to Rs 4050.27 crore for the quarter ended March 31, 2012. The bank's Net Interest Income came in at Rs 11,079 crore for the quarter ended March 2013. The gross NPA declined to 4.75% from 5.3%, quarter-on-quarter. Both the gross and net NPAs declined for the quarter.
Larsen & Toubro (down 6.5%) also declined sharply on disappointing results. Index heavyweight Reliance Industries, Jindal Steel & Power, NTPC, BHEL, Bharti Airtel, Mahindra & Mahindra and ICICI Bank lost 3% - 4%.
Tata Power shed nearly 3%. Sterlite Industries, Maruti Suzuki, Tata Steel, Bajaj Auto, GAIL India, Wipro, Hindalco, Infosys and ITC ended lower by 1% - 2.6%.
Reliance Infrastructure, down almost 10%, was the biggest loser in the Nifty index. Jaiprakash Associates lost over 8%. DLF ended 7.3% down.
Ranbaxy Laboratories lost 7% following reports the Drug Controller General of India will examine all the dossiers and drug applications on the basis of which approvals had been granted to Ranbaxy in the past.
Punjab National Bank, Axis Bank, Grasim Industries, Cairn India, NMDC, Sesa Goa, Lupin, IDFC, BPCL and Bank of Baroda lost 2% - 4%.
Wockhardt plunged 20%. Unitech, Crompton Greaves, HDIL, GMR Infrastructure, Reliance Power, MMTC, Reliance Capital, Adani Enterprises and Century Textiles lost 6% - 11%. MRPL, JSW Energy, Dish TV India, Hindustan Copper, REC, United Breweries and Essar Oil were among the other major losers.
The market breadth was very weak. Out of 2446 stocks traded on BSE, as many as 1737 stocks declined. 592 stocks moved up and 117 stocks ended flat.