Jittery from a slump in the Japaneses markets, the domestic markets saw a fall of nearly 1.5% today.
Increasing nuclear hazards in Japan, following another blast at the ill-fated Fukushima nuclear plant, spread a cloud of nervousness around the world, as a result of which the Indian bourses opened to a negative start today.
After plunging to the day's low of 17,921 soon after opening, the Sensex recovered partially, but it remained in a negative belt throughout the day. In its intra-day recovery, the index shored up 405 points to touch 18,326, but slipped thereafter, as global pressures weighed in while nearing close.
At close, the BSE benchmark extended its losses to end at 18,168 down 272 points, while the Nifty ended at 5,450 down 82 points, as the increasing negative news flow from Japan dampened investor sentiment amidst concerns the loss in Japan will lead to higher business costs in the near term.
Japan's benchmark, the Nikkei 225, which declined 6% at close yesterday, was down 13% in early trades (IST), and this led to an opening of 18,030 for the Sensex, down 414 points, but the index soon regained during the late morning session, with energy shares leading the gains.
Reliance Industries at Rs 1,036 up 2% and Reliance Communications at Rs 101 up 0.5% were the only gainers on the Sensex. RIL gained on a higher y-o-y advance tax payment of Rs 1,054 crore for Q4FY11 versus Rs 770 crore paid in Q4FY10.
Jaiprakash Associates at Rs 81, Maruti Suzuki at Rs 1,215, both down 4%, and ONGC at Rs 271 down 3% were the major Sensex losers.
Amongst the other companies to have paid a higher advance tax for Q4FY11 were Tata Steel, who paid Rs 987 crore versus Rs 513 crore y-o-y, Bajaj Auto at Rs 250 crore versus Rs 175 crore y-o-y, Mahindra & Mahindra at Rs 307 versus Rs 226 crore y-o-y nad Hindlaco at Rs 160 crore versus Rs 110 crore y-o-y.
Engineering and construction major, L&T, has also paid more advance tax in Q4 FY11 at Rs 300 crore versus Rs 270 crore y-o-y, while FMCG major Hindustan Unilever Limited paid less advance tax this fiscal at Rs 150 crore versus Rs 170 crore y-o-y, and Tata Motors paid a meagre Rs 50 crore as against Rs 115 crore y-o-y, sources said.
In the broader markets, the Mid-cap index moved in line with the benchmark to end at 6,468 down 1.4%, while the Small-cap closed down nearly 2% at 7,791.
Losers in the Mid-cap arena were Bajaj Financial Services at Rs 522, Arss Infra Projects at rs 512 and Hindustan Oil at Rs 159, all down 6%.
Twilight Litaka Pharma at Rs 55 down 13%, Sujana towers at Rs 31 down 10% and Symphony at Rs 1,262 down 9% were the major losers on the Small-cap index.
On the whole, the scenario looked grim for investors around the world, as several analysts believe the crisis in Japan has assumed far greater proportion than the oil crisis in Libya, which sent oil prices spiralling to 2.5 year highs last week.
With several refineries shut down in Japan, oil demand is projected to decline temporarily, which may cool oil prices further.
As an after-effect, stock prices of several oil manufacturing companies rose because of the anticipations regarding reduction in subsidy margins for public OMCs.
The Oil & Gas index was the only index in the green on the sectoral chart at 9,969, up only 0.3%, with Reliance Industries, which gained 3% at close yesterday, at Rs 1,036 up 2% was the only gainer in this space.
"If the Libyan crisis spreads to other countries, there may be a spike in crude oil prices. However, at the same time, we would expect Japan to consume less amount of oil going forward because huge part of their economy will be impacted. Hence, we expect short-term correction in oil," said Vaibhav Sanghavi, Director (Equities), Ambit Capital, when asked about his views on the oil and gas sector.
A positive outlook on the government's advance tax collections did not seem to have any impact on the market sentiment, as all the sectoral indices traded in negative territory.
The Realty index bore the brunt of heavy selling, and the index slipped 3% to at 2,054. Top losers in this space were HDIL at Rs 157 down 6%, Orbit Corp at Rs 49 and Mahindra Lifespaces at Rs 336, both down 5%.
Auto stocks were dumped, because a majority of auto components, which are imported from Japan, will see a supply crunch due to the deteriorating condition in the country. Most auto manufacturing companies are located in Japan. Also, rising input costs have dented margins for auto companies, as have anticipations of a probable rate hike by the RBI, when the apex bank announces it's mid-quarter policy review due on March 17.
The Auto index declined 2% at 8,649, and the top losers on the index were Maruti Suzuki at Rs 1,215 down 4%, Exide Industries at Rs 132 and Mahindra & Mahindra at Rs 644 both down 3%.
Metals lost their sheen today as the demand for commodities, driven greatly by the East Asian markets, fell in the face of the Japanese crisis. The index was off 2% at 15,360 at close. Major losers were National Aluminium at Rs 108 down by a whopping 10%, while Sesa Goa at Rs 261 shed 4% and Sterlite Industries at Rs 158 lost 3%.
Rajesh Jain, EVP & Head of Retail Research, Religare Securities, averred, "The initial financial loss on account of the earthquake and tsunami in Japan is estimated at around $2 - 3 billion. However, the Indian markets are not directly impacted with this crisis but the disaster may impact overall investor sentiment."
Asian markets saw a severe impact of the burgeoning devestation in Japan, as threats of a nuclear cloud reaching the country's financial hub Tokyo abounded. A potential radiation catastrophe looms large over the capital, prompting fears of a break in the global economic recovery, as one of the world's most advanced economies braces itself for its worst disaster since the WW2.
The Nikkei slipped 11% to close at 8,605, its worst fall since 1987, while the Hang Seng declined 3% at 22,678, and the Taiwan Weighted also down 3% at 8,235. The Seoul Composite slipped a little over 2% at 1,924, the Straits Times shed more than 2.5% at 2,951, and the Shanghai Composite closed down 1.4% at 2,897.
World stocks fell to 2.5-month lows; the European markets were hit hard by the developments in Japan, and major indices were trading at substantial losses.
France's CAC 40 was down 3%at 3,761, Germany's DAX was at 6,561 down 4.5% and the UK's FTSE 100 was quoting at 5,641 down 2%.
BS
