Sensex hits one-month low, Nifty retreats to 9800

Dalal Street seems to be going through a consolidation mode after hitting life highs in the bygone week. Key indices languished in the red for the fourth consecutive session after succumbing to heavy selling pressure. Market surprises have only started, experts are of the view.

After opening lower, the 30-share Sensex recovered only to slip again to close at 31531.33 hitting a one-month low, after plunging 266.51 points, or 0.84%. The level was last seen on July 7 when it ended at 31360.63. The gauge had lost 527.57 points in the previous three sessions.

The NSE Nifty, on the other hand, recoiled to the 9800 mark, ending the day at 9820.25, down 87.80 points, or 0.89%.

Dr Reddy's, Sun Pharma, Cipla, SBI, Lupin and PowerGrid, falling up to 4.77%.

However, software exporters such as Infosys, Wipro and TCS emerged unscathed with gains, after the rupee weakened against the dollar, helping the BSE IT index close in the green by rising 0.63%. The BSE realty index tanked the most, plunging 5.12%. Healthcare, auto and power followed.

Indian markets has already been downbeat reeling under the regulatory clampdown after the regulator Sebi’s directive imposing trading restrictions on suspected shell companies. Geopolitical tension between the US and North Korea further aggravated global worries leaving investors unnerved. North Korea upped the ante defying the US President's "fire and fury" warning and threatening to strike its military base in Guam.

Risk appetite of the market was soured by the earnings results posted by Tata Motors, Eicher Motors and a few others which were not in sync with expectations. Tata Motors emerged as the top loser on Sensex slumping 8.60% after the company's June quarter earnings failed to meet expectations.

The recent fall in markets is a moderation within the “bull phase” owing to geo-political tension, says Vinod Nair, head of research, Geojit Financial Services. Domestic sentiment has also taken a beating on the back of Sebi's action over shell companies. Additionally, a slowdown in business growth will lead to downgrade in earnings forecast for the next one-two quarters, he added.

Globally, sentiment failed to shore up largely on the back of weak Asian markets and a lower opening in Europe.

Small-cap and mid-cap indices too fell by 2.90% and 2.64%, respectively, on dilution of exposure by retail investors.