Sensex crashes over 850 points on weak earnings, FII selling

The Indian equity benchmarks were on track to close lower for fifth straight session on Friday dragged down by losses IndusInd Bank, Larsen & Toubro Mahindra & Mahindra, HDFC Bank , Reliance Industries and NTPC as string of weak corporate earnings and continuous selling by foreign institutional investors (FIIs) dampen investor sentiment towards equities. The Sensex fell as much as 864 points and Nifty 50 index dropped below its important psychological level of 24,100.

As of 12:23 pm, Sensex was down 733 points or 0.92 per cent at 79,332 and Nifty 50 index declined 272 points to 24,127.

Earnings announced by Nifty 50 companies, have so far, been below street expectations leading to weakness across sectors. Meanwhile, unabated selling by FIIs has also added to the negative sentiment, analysts said.

FIIs have so far this month sold shares worth Rs 80,954 crore making it one of the worst months for FII investments on record, data from the National Securities Depository Limited (NSDL) showed. The selling by FIIs has come at a time when China announced a slew of stimulus measures including rate cuts to revive its slowing economy.

Selling pressure was broad-based as all the 13 sector gauges compiled by the National Stock Exchange were trading lower led by the Nifty Consumer Durables index's nearly 3 per cent fall. Nifty Oil & Gas, PSU Bank, Metal, Media, Bank, Private Bank and Auto indices also dropped between 1.75-2.75 per cent.

Mid- and small-cap shares were also facing selling pressure as Nifty Midcap 100 index dropped 1.7 per cent and Nifty Smallcap 100 index fell nearly 2 per cent.

IndusInd Bank was top Nifty loser, the stock dropped 19 per cent to Rs 1,030.90 after its profit fell more than 40 per cent in second quarter of current financial year on the back of deteriorating asset quality.

Mahindra & Mahindra, Adani Enterprises, NTPC, Shriram Finance, Bharat Petroleum, Larsen & Toubro, Bharat Electronics, Hero MotoCorp, Coal India, Trent and Apollo Hospitals also fell between 3-5 per cent.

On the flipside, ITC rose 2.5 per cent to Rs 483 after its cigarette sales volumes rose nearly 3 per cent in September quarter. Sun Pharma, Hindustan Unilever , Nestle India, Axis Bank , Britannia, Asian Paints and Kotak Mahindra Bank were also among the notable gainers.

The overall market breadth was extremely negative as 3,207 shares were declining while 627 were advancing on the BSE.