The rupee's retreat against the U.S. dollar after a firm start, worries about near term economic outlook and caution ahead of release of industrial production data prompted investors to indulge in some heavy selling in afternoon trade and resulted in the key indices Sensex and Nifty closing on a weak note on Thursday.
Stocks opened marginally up on positive cues from Asian bourses, but faltered swiftly as the rupee gave up early gains and started sliding lower. The partially convertible Indian rupee, which rose to 62.92 in early trades, hitting its best level since 19 August, gradually slid to around 63.95.
The Sensex, which advanced to 20,052.05 in early trades, plunged to a low of 19,676.49 in the final hour and eventually ended at 19,781.88 with a loss of 215.57 points or 1.08%. The Nifty closed at 5850.70, around 35 points off the day's low of 5815.80, recording a loss of 62.45 points or 1.06%.
Metal and bank stocks, among the prominent gainers in recent session, declined sharply on profit taking. Consumer durables, automobile, oil, PSU and capital goods stocks too mostly ended notably lower.
Information technology and power stocks failed to hold at higher levels. Pharmaceuticals and FMCG stocks turned in a mixed performance. Realty stocks saw some hectic buying, but gave up most of the ground past mid afternoon. Buying was stock specific in midcap and smallcap segments.
Tata Steel, BHEL, Hero Motocorp, ONGC and Maruti Suzuki lost 3% - 4.2%. Sesa Goa, Coal India, Hindalco, Hindustan Unilever and Tata Motors lost over 2.5%.
Bharti Airtel, ICICI Bank, State Bank of India, HDFC Bank, Infosys, Tata Consultancy Services, Wipro, Reliance Industries, Sun Pharmaceutical Industries, Jindal Steel & Power, Bajaj Auto and Mahindra & Mahindra ended lower by 1% - 2%.
Jaiprakash Associates lost nearly 12% following Jaypee Cement Corporation, a wholly-owned subsidiary of the company, executing an agreement to sell its cement plant in Gujarat to UltraTech Cement for an enterprise value of Rs 3800 crore. Ultra Tech Cement shares ended 0.7% up.
IndusInd Bank ended 5.6% down. Grasim Industries, BPCL, ACC, Ambuja Cements, Kotak Bank, Reliance Infrastructure, DLF and Asian Paints lost 1% - 3%.
Tata Power moved up nearly 4%. IDFC, ITC, GAIL India, Ranbaxy Laboratories, Lupin, Cipla, HCL Technologies, NTPC and HDFC closed with sharp to moderate gains.
Zensar Technologies, Eros International and Suzlon Energy saw some buying on stock specific news.
The market breadth was almost even. Out of 2503 stocks traded on BSE, 1189 stocks declined. 1166 stocks moved up and 148 stocks ended flat.