Sensex ends 136 pts down, Nifty falls below 5200

Mumbai: The BSE Sensex on Wednesday shed more than half of Tuesday's gains due to profit booking by investors and weak global trend, though it was a volatile session ahead of F&O expiry on Thursday. The NSE Nifty fell nearly 5 per cent in the March series so far, weighed down by capital goods, banks, metals and oil & gas stocks while FMCG outperformed.

The BSE benchmark fell 135.74 points or 0.79 per cent, to close at 17,121.62 led by 21 components. Meanwhile, the NSE Nifty ended below the 5200 level, which lost 48.40 points to 5,194.75.

Wednesday's fall was majorly led by banks due to tight liquidity situation. Country's largest lender State Bank of India fell 2.4 per cent after the bank raised deposit rates by 25-100 basis points for deposits maturing within one year amid tight liquidity condition. Corporates had withdrawn money for paying advance tax by March 15.

After looking at current liquidity crunch, Sudip Bandyopadhyay, MD & CEO, Destimoney Securities Pvt Ltd expects some kind of a liquidity relief from RBI very soon.

"Probably the RBI will not wait till the next credit policy on April 17; even before that they may come with some kind of liquidity-boosting measure like SLR or CRR. That will ease somewhat pressure on the banking sector in terms of liquidity," he adds.

Private sector lenders ICICI Bank and Axis Bank were down over 2 per cent; Kotak Mahindra Bank tanked 3.4 per cent. PNB and HDFC Bank fell over 1 per cent. Housing finance company was down 0.9 per cent.

High bonds yields too dampened the sentiment. The 8.79 per cent 2021 10-year benchmark bond yield rose 1 per cent to 8.60 after the borrowing calendar of the government indicated heavy borrowing in the first week of April. Bank of America Merrill Lynch sees the yield in a range of 8.50-9 per cent between now & September. The government is going to raise 65 per cent of its borrowing programme (total Rs 5.69 lakh crore) in first half of FY13.

Global markets were down post weak economic data from US and Europe yesterday. China's Shanghai hit quite badly, falling 2.65 per cent - more than other global peers. Hang Seng and Nikkei fell over 0.7 per cent. European markets too were down with moderate losses.

Infosys and Tata Consultancy Services, country's largest software services exporters declined 0.8-1 per cent. State-run oil & gas producer ONGC tumbled 2.75 per cent while rival Reliance Industries, India's most valued stock lost 0.65 per cent.

State-owned Bharat Heavy Electricals slipped 1 per cent whereas rival Larsen & Toubro gained 0.4 per cent. Among metals, Sterlite Industries and Hindalco tanked 2-2.75 per cent while Tata Steel shot up 2 per cent.

Shares of Maruti Suzuki, country's top car maker rallied 1 per cent after company said the cost of higher tax imposed by government would pass on to customers. Cigarette major ITC gained 0.5 per cent.

Stocks in News

Shares of Coal India closed flat ahead of board meeting today. Amid independent directors opposing a proposal to sign fuel pacts with power producers for a minimum 80 per cent supply of the commitment, CIL board will meet on Wednesday to get the draft agreement approved, reports ibnlive.com.

Dr Reddy's Labs rose 1 per cent amid extremely high volume as the company launched Quetiapine fumarate tablets, a bioequivalent generic version of Seroquel tablets in the US market on March 27, 2012.

Linc Pen and Plastics shot up 20 per cent post Japan's Mitsubishi Pencil has picked up a 13.5 per cent stake in the company for Rs 20 crore.

United Breweries and UB Holdings gained 1.5-2 per cent after the news that liquor baron Vijay Mallya could be looking to offload 12-13 per cent of his stake in United Breweries. Sources say Mallya and Heineken are in final stages of negotiations and Heineken may look to acquire controlling stake. Deal could be valued around Rs 1700 crore. United Spirits rallied nearly 5 per cent.

Dhanlaxmi Bank was down 4 per cent ahead of its board meet today to discuss its revival plan. The board may also discuss sale of its 15 per cent stake n new silk route controlled Destimony Securities.

In the second line shares, SREI Infrastructure, Mercator, HDIL, Titan, BEML, JSW Steel, Unitech, Punj Lloyd, Allahabad Bank, Bajaj Hindusthan, Voltas, HCC, Indiabulls Real and Lanco Infratech were down 2-6 per cent. Gitanjali Gems down 7 per cent while Shree Ganesh Jewellery shot up 12 per cent amid heavy volume.

About three shares declined for every share gaining on the BSE.