Karnataka election impact: Stocks nosedive in nervous trade; crude oil offer little respite

Mumbai: Equity benchmarks nursed losses for the third straight day today as nervous investors took money off the table amid political wrangling in Karnataka and hardening crude oil prices.

The BSE Sensex plunged 239 points to end at 35,149.12, while the NSE Nifty tumbled 58.40 points to 10,682.70.

Globally, crude oil prices inched closer to $80 per barrel, stoking fears of rising import bills and worsening fiscal deficits for energy importers like India.

On the political front, BJP’s B S Yeddyurappa was sworn in as the chief minister of Karnataka, even as the Supreme Court made it clear that government formation would be subject to the final outcome of the case before it.

Muted quarterly earnings, mixed cues from global markets and unabated foreign fund outflows added to the volatility, brokers said.

The 30-share Sensex resumed higher at 35,483.62 and advanced to a high of 35,510.01. However, it tumbled to 35,087.82 in a sudden late-session sell-off, before finally ending at 35,149.12, down 238.76 points, or 0.67%.

This is the benchmark’s lowest closing since May 4, when it had closed at 34,915.38.

The NSE 50-share Nifty also lost 58.40 points, or 0.54%, to 10,682.70, after shuttling between 10,777.25 and 10,664.50.

Foreign portfolio investors (FPIs) net sold shares worth ₹699.22 crore, while domestic institutional investors (DIIs) bought equities to the tune of ₹229.06 crore yesterday, as per provisional data.

“Market traded in a negative bias despite gains in rupee while investors’ focus is now shifting to earnings after the state election dilemma.

“Small and mid-caps outperformed…On the global front, US yield rose above 3% mark, whereas oil remains at elevated levels which could dampen the flow of funds to EMs, especially to India were the valuation is comparatively high,” said Vinod Nair, Head of Research, Geojit Financial Services.

Among sectoral indices, FMCG suffered the most by falling 0.90%, followed by bankex 0.63%, metal 0.59 per cent, power 0.14%, teck 0.11% and IT 0.10%.

On the other hand, consumer durables rose 1.37%, realty 0.41 %, infrastructure 0.28%, capital goods 0.24% and oil and gas 0.08%.

In the Sensex pack, ITC emerged as the biggest loser, plunging 2.43% largely on profit-booking after yesterday’s rally, followed by Bharti Airtel at 2.34%.

Shares of Tata Steel fell 1.93% despite the company yesterday reporting a consolidated net profit of ₹14,688.02 crore for the March quarter.

Other laggards were HDFC Ltd 2.08%, Axis Bank 1.79%, Adani Ports 1.47%, Yes Bank 1.20%, RIL 1.18%, NTPC 1.12%, Asian Paint 1.04%, IndusInd Bank 1.01%, Kotak Bank 0.99%, L&T 0.86 %, ICICI Bank 0.67%, Dr Reddy’s 0.66%, Hero MotoCorp 0.63%, Infosys 0.43%, M&M 0.38%, HUL 0.31% and TCS 0.08%.

However, Coal India rose 2.53%, Sun Pharma 1.75%, Tata Motors 1.53%, Wipro 1.15%, Bajaj Auto 0.94%, ONGC 0.91%, HDFC Bank 0.15%, Maruti Suzuki 0.14% and SBI 0.06%.

The broader markets outperformed the key indices, with the BSE mid-cap index rising 0.67% and the small-cap index gaining 0.43%.

Shares of Reliance Communications, after yesterday’s plunge, staged a strong comeback by rising 56.87% on reports of settlement talks with Ericsson.

In the Asian region, Shanghai Composite Index fell 0.48%, while Hong Kong’s Hang Seng slipped 0.54%. Japan’s Nikkei, however, rose 0.53%.

In the eurozone, stock markets in Germany and France were up in early trade and rose up to 0.47 %. London’s FTSE too gained 0.11%.