Sensex Today Tanks 906 Points; BSE Smallcap Index Slides 5%

After opening on a negative note, Indian share markets continued the downtrend as the session progressed and ended the day weak.

Bears prowled on Dalal Street on Wednesday, March 13, with the benchmark S&P BSE Sensex and Nifty50 indices falling over 1% in intraday trade today.

At the closing bell, the BSE Sensex stood lower by 906 points (down 1.2%).

Meanwhile, the NSE Nifty closed lower by 338 points (down 1.5%).

ITC, ICICI Bank, and HCL Tech were among the top gainers today.

Coal India, NTPC, and Adani Ports, on the other hand, were among the top losers today.

The GIFT Nifty ended at 22,080 down by 377 points.

Broader markets ended the day lower. The BSE Mid Cap ended 4% lower and the BSE Small Cap index ended 5% lower.

Sectoral indices are trading negatively with socks realty sector, the power sector, and the telecom sector witnessing the most selling pressure.

Shares of TCS, Colgate, and Intellect Design hit their respective 52-week highs today.

The rupee is trading at 82.86 against the US$.

Gold prices for the latest contract on MCX are trading flat at Rs 65,980 per 10 grams.

Meanwhile, silver prices are trading 0.2% higher at Rs 73,963 per 1 kg.

Here are three reasons why Indian Markets are falling today

#1 Broader Markets Selling

Market regulator Securities and Exchange Board of India (Sebi) has been scrutinizing flows into mid, and small-cap stocks amid a massive rally in the segment over the past few years.

The regulator has observed signs of manipulation at both the trading and issuance levels in the small and midsize enterprise (SME) space.

#2 Profit Booking

26 of 30 Sensex stocks, and 46 of 50 Nifty stock were reeling under pressure on Wednesday. PowerGrid, and Adani Enterprises shed 6 per cent each, Adani Ports 5.5%, Coal India 5.4%, and NTPC 5%.

That apart, Tata Steel, ONGC, Titan, Hindalco, Bharti Airtel and others declined in the range of 1-4%.

#3 Mahadev Betting App Case

The Enforcement Directorate (ED)'s investigation into the multi-crore Mahadev Online Book illegal betting app scam has found a link to the bubble in the stock market. The ED has frozen shares worth Rs 11 bn held in demat accounts linked to Dubai-based alleged hawala operator Hari Shankar Tibrewala.

ITC Jumps 9%. Here's why

In news from the FMCG sector, London's British American Tobacco (BAT) on Wednesday likely sold a 3.5% stake in FMCG major ITC at an average selling price of Rs 404.4 per share in block deals to institutional investors. The stake sale is worth about Rs 175 bn but details of the buyer would be known later in the evening.

BAT, which makes Dunhill and Lucky Strike cigarettes, sold 43.68 crore shares, after which its shareholding in ITC fell to 25.5% from 29%. The company will use proceeds from the stake sale to buy back BAT shares. It had yesterday initiated the block deal and hired BofA Securities and Citigroup to handle it.

The news flow around BAT's intent to sell a stake in ITC has been a key supply hangover for the Nifty stock, which has been underperforming in the last few months. Following the stake sale, ITC shares jumped 8.6% to the day's high at Rs 439 on BSE.

BAT, whose initial investment in ITC dates back to the early 1900s, said it continues to be fully supportive of ITC's management team, performance and strategy.


Microtech Developers Share Price is Falling

Moving on to news from the realty sector, shares of Lodha, listed as Macrotech Developers, fell over 3% in early deals of 13 March, a day after promoter Sambhavnath Infrabuild and Farms sold 4.9 m shares, or a 0.5% stake, in the real estate developer at an average price of Rs 1,180.02 a share. The transaction was valued at Rs 5.9 bn.

Earlier this week, the company successfully raised Rs 30 bn through a qualified institutional placement (QIP). The QIP marks the fourth round of fundraising for the company in the last three years, bringing the total funds raised to more than Rs 130 bn.

Noteworthy participants in the QIP included Rajiv Jain's GQG Partners, Invesco Developing Markets Fund, and Stitching Depositary APG Emerging Markets Equity Pool.

Invesco Developing Markets Fund secured the most shares in the QIP issue, accounting for 21.4% of the issue size followed by GQG Partners (11.2%) and Stitching Depositary APG (9%).

The funds will be used by Macrotech to repay debt, acquire land and cover other expenses.

More By This Author:

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Disclosure: Equitymaster Agora Research Private Limited (Research Analyst) bearing Registration No. INH000000537 (hereinafter referred as 'Equitymaster') is an independent equity ...

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