Mumbai: Falling for fifth straight day, the BSE benchmark Sensex Thursday lost 126 points to end at a 2-week low with ITC shares plunging over 3.5 percent after its weight was reduced in FTSE global equity index series.
ITC, which is one of the most influential stocks in 30-share Sensex, closed 3.55 percent down on heavy selling after index provider FTSE cut the Indian conglomerate's weight in global equity index series from 75 percent to 24 percent.
"ITC was one of the major reasons. It dropped by a wide margin. Towards the end, others like IT stocks also weakened," said Dipen Shah, Head - PCG Research, Kotak Securities.
Overall, 23 stocks in Sensex, including L&T, HUL, SBI, HDFC and Infosys, closed with losses. Consequently, the gauge dropped 126 points, or 0.65 percent, at a two-week low of 19,229.26 points. It has now lost 258 points in five days.
Similarly, the NSE 50-share Nifty also declined by 36.50 points or 0.62 percent to finish at 5,851.50.
Brokers said the cautious investors also indulged in selling over concern that any rise in Wholesale Price Index (WPI) data might delay the much-awaited rate cut by Reserve Bank. WPI-based inflation data will be announced on Friday.
"With retail inflation spiking, investors and traders are worried that the RBI may choose to delay the much sought rate cuts," said Amar Ambani; Head of Research - IIFL.
The selling picked up in the second half of the session after European stocks dropped as investors focussed on reports that the US central bank's plan to buy USD 45 billion a month of treasuries may fail to offset effects of US 'fiscal cliff'.
Selling was wide-based as all sectoral indices, barring auto and refinery, closed with losses upto 2.73 percent.
Second-line stocks attracted profit-selling after rising for last few days. As a result, BSE-Midcap and BSE-Smallcap indices underperformed the Sensex, losing around one percent each.
Key Asian benchmark indices in Japan, Taiwan, Singapore, South Korea and Taiwan rose between 0.48-1.68 percent while those in China and and Hong Kong fell 0.26 percent and 1.02 percent respectively.
European markets, however, were trading lower in their afternoon deals. Key benchmark indices in France, Germany and UK eased by 0.18-0.44 percent, after logging initial gains.
Commenting on Indian markets, Kishor P Ostwal, CMD, CNI Research Ltd said: "Market has corrected for the fifth consecutive day as inflation numbers are awaited tomorrow. The cloud on Banking Amendment Regulation Act made traders jittery and we have seen sell-off in mid caps."
In all, 23 out of the 30 Sensex-based scrips closed with losses while others 7 finished with gains.
Besides ITC which was the biggest loser, other major losers were Sterlite Ind (3.27 percent), Cipla (2.14 percent), Hindalco (2.03 percent), BHEL (1.85 percent), Tata Steel (1.78 percent), NTPC (1.70 percent), SBI (1.44 percent), L&T (1.35 percent), Dr Reddy's Lab (1.18 percent), M&M (1.03 percent) and Infosys (0.69 percent).
Among gainers, Tata Motors rose by 3.96 percent after Tata Motors-owned Jaguar Land Rover today said its global sales in November increased by 14 percent to 29,893 units.
Others including Jindal Steel (1.76 percent), Bharti Airtel (1.54 percent) and ICICI Bank (0.80 percent) also bucked the weak trend.
Among BSE sectoral indices, the BSE-CD dipped by 2.73 percent, followed by BSE-FMCG (2.64 percent), BSE-Realty (1.62 percent), BSE-Metal (1.16 percent), BSE-CG (1.16 percent) and BSE-Power (1.08 percent).
The total market breadth remained negative with 1,834 stocks losing ground while 1,106 finishing with gains. Total turnover was nearly stable to Rs 2,827.91 crore from Rs 2,825.03 crore Wednesday.
Meanwhile, Foreign Institutional Investors (FIIs) bought shares worth a net Rs 952.75 crore on Wednesday, as per provisional data from stock exchanges.