Losing steam after two successive trading sessions of gains, key Indian equity indices ended in the red on Tuesday, pulled down mainly by healthcare stocks which took a hit after the government banned 344 drug combinations, including popular ones with large market.
The 30-share sensitive index (Sensex) of BSE, which closed on Monday at 24,804.28 points, opened slightly higher on Tuesday at 24,832.04 points. Soon after, the slide started and the 30-share index eventually ended at 24,551.17 points — with a loss of 253.11 points, or 1.02 per cent.
At the National Stock Exchange, the 50-share Nifty opened just a tad higher at 7,535.85 points, against the previous close at 7,538.75 points. Thereafter, it, too, saw its fortunes decline to end the day at 7,460.60 points — with a loss of 78.15 points, or 1.04 per cent.
"The market slid on profit booking amid investors taking a cautionary step ahead of the US Fed policy meet due on Tuesday-Wednesday," said Vinod Nair, head of fundamental research with Geojit BNP Paribas Financial Services.
"The Fed is likely to hold their current interest rate as global uncertainty may refrain them from a rate hike decision. On the macro front, the retail inflation eased to 5.18 per cent, which will give some room for the Reserve Bank of India to cut their interest rate."
The general trend was also cautious, with as many as 22 stocks that go into the Sensex basked ending in the negative territory. Only eight managed to stay afloat. At the NSE, 35 Nifty stocks declined, while 15 were up.
A further look at the 19 sector-specific indices of BSE showed that the index for healthcare fell the most by 3.01 percent percent, against the fall of 1.02 percent in the Sensex. This was followed by fast-moving consumer goods, down 1.54 per cent.
In the past weekend, the government banned 344 drug combinations through a gazette notification, based on recommendations of an expert committee. The health ministry has also come down heavily on the misuse of anti-biotics.
Five indices stayed afloat — energy, banking, consumer durables, metals and oil and gas.
Again among the Sensex stocks, four out of top five losers were from healthcare. Lupin, down 7.59 per cent at Rs.1,726.60; Dr. Reddy, down 2.96 per cent at Rs.3,138.65; Cipla, down 2.48 per cent at Rs.524.70; and Sun Pharma, down 2.33 per cent at Rs.843.90 were also the only four on the Sensex.
Otherwise, the top five gainers were State Bank of India, up 1.84 per cent at Rs.185.25; Tata Steel, up 1.18 per cent at Rs.299.80; Bharti Airtel, up 0.81 per cent at Rs.343.65; Axis Bank, up 0.77 per cent at Rs.419.15; and Bharat Heavy Electricals, up 0.52 per cent at Rs.106.15.
"Overseas also, the stock markets edged lower as crude prices continued to slide in Asia after hopes that major crude producers will freeze output to ease a world surplus were dashed," said Shreyash Devalkar, fund manager for equities with BNP Paribas Mutual Fund.
"Benign macro-economic data failed to enthuse participants as the markets trundled downwards into the negative zone," he said, adding the action was mixed on the sectoral end with pharma, media, IT, fast-moving consumer goods, witnessing heavy selling pressure.