Dalal Street fell 3.5 per cent on Wednesday to its lowest close in seven weeks as investors cut positions ahead of key earnings and on rising risk aversion among foreign investors. The benchmark BSE Sensex lost 321.38 points to close below 9,000 mark at 8,779.17,its lowest close since December 3. The 50-share NSE Nifty Index lost 3.2 per cent to 2,706.15.
Weak global sentiment towards financial stocks,a grim outlook for companies and falling world markets added to the gloom,traders said. If you see the trend,it is absolutely a flight to safety. People are getting out of whatever they don’t perceive to be cash-positive companies, said Jayesh Shroff,fund manager at SBI Mutual Fund. Heavyweights Reliance Industries and Bharti Airtel and financials led the losses as foreign investors pared their exposure.
FIIs have pulled out about $660 million from Indian shares this month,following net sales of more than $13 billion in 2008,when the main index lost over half its value.
RIL dropped 5.3 per cent to Rs 1,119.40 on market forecasts the energy giant would post a drop in quarterly earnings on Thursday for the first time in three years due to lower refining margins. Leading mobile operator Bharti Airtel dropped 5.2 per cent to Rs 583.60 on worries rising competition and falling tariffs could slow down earnings growth in coming quarters. Weak European markets worsened sentiment,pushing banking stocks further.