Sensex drops 128 points to one month low; ICICI Bk, L&T shares hit
The Sensex on Wednesday shed 128 points as heavy selling in ICICI Bank, L&T and RIL dragged the index to one-month low levels, amid an insipid trend in global markets ahead of a crucial ECB meeting on Thursday.
The BSE benchmark index, which had gained 56 points on Tuesday, opened weak and traded in negative terrain for most of the session as metal, capital goods and bank shares were under pressure.
The rupee, which slipped to near 56-levels against the US dollar, also made investors nervous. A nearly 3.6 per cent drop in ICICI Bank shares and L&T, which lost nearly 3 per cent weighed down the 30-share Sensex where 21 stocks lost value. RIL, which shed one per cent, also soured the sentiment.
The Sensex ended 127.53 points, or 0.73 per cent down at 17,313.34, its lowest closing since August 3.
"Metal shares led the decline following the weakening in global commodity prices as demand slows. Jindal Steel & Power and Hindalco hit 52-week lows. Selling pressure continued in capital goods on concerns of slowdown in the economy and consequent delay in execution of major power projects," said Nidhi Saraswat, Senior Research Analyst, Bonanza Portfolio.
The coal block allocation issue also cast its shadow on Parliament for the eleventh day on Wednesday paralysing proceedings with BJP remaining unrelenting on the demand for resignation of Prime Minister Manmohan Singh.
Brokers said a weak trend in the Asian region and lower opening in Europe ahead of European Central Bank's meeting on Thursday, further influenced the domestic sentiment.
The 50-share National Stock Exchange index fell by 48.30 points, or 0.92 per cent to close at 5,225.70.
Among sectoral indices, the BSE-Metal suffered the most falling by 2.64 per cent on reports of falling base metal prices on the London Metal Exchange.
The BSE-Capital Goods sector index logged the second worst performer by losing 2.54 per cent.
The BSE-Bankex declined 1.82 per cent on worries over bad loans and growth prospects amid reports that Morgan Stanley has downgraded rating on Axis Bank to 'underweight from 'equal weight'.
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