Sensex drops to 2-week low at close

Sustained selling was also seen in L&T,BHEL,ICICI Bank,HDFC Bank,ONGC,Coal India,Tata Motors and Bajaj Auto.

After erasing some losses on the back of gains in Infosys,TCS and ITC,Sensex closed at 17,631.71,down 47.10 points or 0.27 per cent over yesterday. This is the lowest closing for the 30-share index since 17,557.74 hit on August 10.

The Parliament failed to transact any business for the sixth straight day today as BJP continued to create ruckus by pressing its demand for resignation of Prime Minister Manmohan Singh even as other Opposition parties wanted to take up debate on CAG report and other business.

“Market sentiment became sceptical after political disagreement over several matters indicated that sturdy reform measures cannot be expected easily in near future,” said Nidhi Sarswat,Senior Research Analyst,Bonanza Portfolio.

A weak trend in the Asian region and lower opening in Europe on reports of slowdown in China and Eurozone might continue to hurt global economic growth,further dampened the market sentiment at the domestic front.

Besides,lack of any major overseas trigger compelled investors to book profits ahead of the expiry of Futures & Options contracts on August 30,experts.

Among sectoral indices,IT,FMCG and Power indices outperformed Sensex. Total market breadth,however,was negative as 1,889 scrips ended lower while 929 ended higher.

The 50-share National Stock Exchange index Nifty lost 15.65 points,or 0.29 per cent to 5,334.60,after touching the day’s low of 5,312.60.

Barring China and Hong Kong which closed in positive terrain,other Asian markets ended lower as investor sentiment dampened after the Japanese government cut its economic forecast for the first time this year.

Key benchmark indices in Japan,Singapore,South Korea and Taiwan shed between 0.08 per cent to 1.42 per cent while those from China and Hong Kong gained by 0.85 per cent and 0.07 per cent respectively.

European stocks too were trading lower in their afternoon deals. The France’s CAC and the Germany’s DAX were down 0.42 per cent each and the UK’s FTSE was trading marginally down.

Back home,the BSE-Metal index was the top loser among the 13 sectoral indices with a drop of 2.44 per cent,followed by the BSE-CG index that shed 1.66 per cent. Interest-rate sensitive stocks from banking,auto and realty also suffered losses on weak hopes of rate cuts.

Kishor P Ostwal,CMD,CNI Research said,” Market was down and volatile due to rollover. We expect market to recover tomorrow.” Second-line stocks were also hit hard and continued to underperform the Sensex. As a result,the BSE-Smallcap and

BSE-Midcap indices closed lower by 1.42 per cent and 1.03 per cent respectively.

As many as 18 of the 30 Sensex-based scrips closed down.

Sterlite was the top loser with a fall of 5.13 per cent,followed by Jindal Steel (4.88 pc),Hindalco (3.09 pc),L&T (2.53 pc),ONGC (1.91 pc),Tata Steel (1.84 pc),CIL (1.69 pc),Bajaj Auto (1.65 pc),ICICI Bank (1.43 pc),Tata Motors (1.41 pc) and HDFC Bank (1.13 pc).

Among sectors,the BSE-Bankex was down 0.97 per cent,the BSE-Auto 0.81 per cent and the BSE-PSU down 0.68 per cent.

The total turnover was higher at Rs 2,335.85 crore from Rs 1,747.67 crore yesterday.

FIIs bought shares worth Rs Rs 200.40 crore yesterday as per provisional data with stock exchanges.