Stocks slump on poll result jitters, jobs data from US

Tags: News
Stocks fell for the second consecutive day on Wednesday as investors turned cautious ahead of the exit polls on state elections and the US monthly jobs data while a sudden spurt in crude price added to the nervousness.

The exit polls later in the day showed the BJP was ahead in four of the five states that went to polls, Madhya Pradesh, Rajasthan, Chhattisgarh and Delhi.

The final results of the election will be known this Sunday.

Market analysts have termed the state elections as the ‘semifinals’ ahead of the national elections in May 2014.

On the Singapore Stock Exchange, Nifty futures — SGX Nifty — quoting with gains at 8 pm (IST) following the exit poll results.

Some analysts said the investor community fears that a setback in the state elections may prompt the Congress-led UPA to announce more populist measures and stay off bold reforms.

The Rs 7,000 crore follow-on public offering of Power Grid Corporation of India (PGCIL) also had a bearing on the broader market and some funds appeared to have booked profits on certain counters to bid for the attractively-priced FPO.

The bellwether Sensex fell 146.21 points, or 0. 70 points, to close at 20,708.71 while the broader Nifty50 index ended the day at 6,160.95, down 40.90 points or 0.66 per cent.

Big losers of the day included Hindalco Industries (Rs 120.75, down 2.50 per cent), ICICI Bank (Rs 1,065.15, down 1.93 per cent), ITC (Rs 313.25, down 1.86 per cent), ONGC (Rs 287, down 1.66 per cent) and Tata Motors (Rs 393, down 1.58 per cent).

“The market will remain volatile till the general elections next year. But we feel Nifty would touch the 7,000 level over the next 12 months. Unfortunately, retail investors will enter only at that peak level. This has been the trend,” said an analyst at Emkay Financial Services.

Any sign that the nation could throw up a split verdict in the general elections might disrupt a rally that has seen shares gain nearly 20 per cent since late August.

Analysts said investors were also worried about the US jobs data scheduled for release later in the day, as some growth signals in these numbers may prompt the US Federal Reserve to start tapering its monetary stimulus programme.

Fears of the withdrawal of this easy money roiled Indian market during the summer, sending the rupee to a record low.

Other markets in Asia and Europe also fell on Wednesday ahead of the jobs data. EuroStoxx50 was down 1.01 per cent, FTSE100 was lower by 0.67 per cent and CAC40 slipped 0.95 per cent. Japan’s Nikkei closed 2.17 per cent lower and the Hang Seng index fell 0.76 per cent.

The data, released later in the day showed, US private employers added 215,000 jobs in November, topping economists' expectations, reinforcing expectations that the Fed may soon begin to wind down its asset purchases.

On Dalal Street, FIIs were net buyers for Rs 52.11 crore worth of shares on Wednesday, according to stock exchanges’ provisional data.

FIIs have been net buyers of stocks worth $17.83 billion (Rs 99,111 crore) in this calendar so far, as per Sebi data.

“As we enter the last month of 2013, we expect the market to respond to the outcome of the state elections and comments from the Fed officials regarding the timing of the QE3 withdrawal,” Reuters quoted Dipen Shah, head of private client group research at Kotak Securities, as saying.

Among the sectoral indices, the biggest loser was BSE realty index (down 2.67 per cent), followed by the FMCG index (down 1.36 per cent), auto index (down 1.05 per cent) and the capital goods index (0.99 per cent).

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