Mumbai, Aug 3: After dropping nearly 200 points, the Sensex today staged a smart recovery tracking strong European cues to close just 26 points lower as oil&gas, pharma and IT stocks attracted buying support at existing low levels.
In line with global stocks that slumped after ECB did not announce immediate steps to tackle debt crisis, Indian shares tanked with the BSE benchmark index opening 60 points lower. It immediately touched the day's low of 17,026.97, down 197.39 points from its previous closing.
However, a sharp bounce-back in European stocks boosted the sentiment and buying in Wipro, NTPC, Dr Reddy's and ONGC shares lifted the Sensex. It concluded at 17,197.93, down 26.43 points, on support from Reliance, Infosys and HDFC Bank.
European indices were trading higher with Germany's DAX up 1.95 per cent, France's CAC higher by 2.25 per cent and the UK's FTSE up 1.30 per cent in afternoon deals.
Meanwhile, the rupee also rebounded from session's low of 56.19 and was last trading at 55.9 tracking a rebound in euro.
Reports that India's crucial monsoon is expected to be 15 per cent deficient this season, the first indication of a drought in 3 years, worried investors.
“If we factor in that agriculture which would not be strong... (growth) would be closer to 6 pc,” said Planning Commission Deputy Chairman Montek Singh Ahluwalia in Delhi.
Metals stocks were the worst hit today with Sterlite and , Tata Steel losing 2 per cent each on reports of slower demand.
Traders said fears of drought hit interest-rate sensitive stocks such as banks as RBI may not cut interest rates. Auto stocks, including M&M and Tata Motors, also ended lower on apprehensions poor rains will hit rural incomes.
The 50-share NSE index Nifty declined 12.05 points, or 0.23 per cent to 5,215.70, after touching a low of 5,164.65. Asian stocks showed a mixed trend after European Central Bank (ECB) disappointed markets with their policy stance.
Analysts said IT shares attracted investors after rupee breached the 56-mark against the dollar. A weak rupee boosts revenues of IT companies denominated in dollars.
“Banks continues to under-perform and should be avoided. Pharma stocks can outperform the broader market on a relative basis,” said Shubham Agarwal, Associate VP & Senior Technical Equities Analyst, Motilal Oswal Securities.
In Asia, key benchmark indices in Hong Kong, Japan, South Korea and Taiwan fell by between 0.12 per cent to 1.13 per cent while Shanghai's composite and Singapore's Straits Times ended higher by 1.02 per cent and 0.50 per cent respectively.
Back home, 17 stocks of the 30-share Sensex finished with losses while 13 stocks ended with gains.
Major losers from the Sensex were Sterlite Ind (2.62 pc) followed by Tata Steel (2.20 pc), Hindalco (2.06 pc), ICICI Bank (1.98 pc), Jindal Steel (1.91 pc), M&M (1.44 pc), Tata Motors (1.03 pc) and Tata Power (0.92 pc).
However, Wipro led the gainers rising 2.04 per cent, followed by NTPC (1.84 pc), Dr Reddy's (1.62 pc), ONGC (1.34 pc), Gail (1.29 pc), HDFC Bank (1.00 pc) and BHEL (0.72 pc).
Among sectoral indices, the BSE-Metal fell by 1.64 per cent, followed by the BSE-Auto (0.83 pc), the BSE-Bankex (0.62 pc) and the BSE-Realty (0.56 pc).
On the other hand, the BSE-Refinery moved up by 0.68 per cent the BSE-HC rose 0.58 per cent and the BSE-IT inched up 0.54 per cent.
The total market breadth at the BSE turned negative as 1,514 shares finished lower while 1,262 shares ended higher. The total turnover firmed up to Rs 1,905.55 crores from Rs 1,756.06 crore yesterday.
Meanwhile, Foreign Institutional Investors (FIIs) bought shares worth Rs 140.13 crores yesterday as per provisional figures on the stock exchanges.
