The BSE Sensex managed to eke out gains after range bound trade Tuesday. At close, the Sensex ended 21.70 points or 0.12% higher at 17,243.84 while the broader Nifty index advanced 9 points to 5,243.60. The Sensex traded in a 150-point range while the Nifty moved in a 40-point band.
However, the real action was witnessed in gas utility stocks. Chief among them was Indraprastha Gas that plunged 34% to end at 229.80. The stock had earlier plummeted 46% to a new 52-week low of Rs 170. Huge selling pressure was witnessed in the stock after a government regulator slashed prices by nearly 60% retrospectively. In a report Citi said the move could cost the PSU company Rs 900-1,200 crore.
"Such steps are not going to help matters when it comes to FII flows. The government should not change the rules of the game mid-way. A de-rating in the utilities and gas space is likely," TS Anantakrishnan of Prime Broking Company (India) said.
Other companies that own stake in the company - BPCL (-2.2%) and Gail (-1.8%) also declined. Other gas utilities that come under the purview of the regulator - GSPL (-7.5%) and Petronet LNG (-2.9%)- closed lower.
Metal, capital goods and IT stocks were the biggest underperformers, falling nearly 1% today. Defensive stocks such as FMCG (2%) saw strong gains. Auto stocks also closed higher.
On the Nifty, 22 stocks closed higher. Tata Power (4.2%), Reliance Communications (3.2%), Tata Motors (3%) and HUL (2.6%) closed with big gains. Banking stocks also gained, hoping for a rate cut.
Pharma firms Ranbaxy (-2.6%) and Dr Reddy's (-2.1%) saw profit booking. IT major Infosys (-1.8%) closed lower ahead of Q4 earnings on Friday.
The market breadth was slightly negative with 53% stocks closing lower on the broader BSE 500 index.
Global cues remained negative. In Asia, Chinese markets closed with gains but Japan's Nikkei closed lower. European markets traded in the red.
Analysts said as long as Nifty traded above long term support levels, there were hopes of an upside.
"This is a corrective decline of the rally that we saw from 5,160 levels. The decline is on low volumes so some recovery is expected over the next few days," Manish Shah, technical analyst at Fortune Financial Services (India) Limited told NDTV Profit.
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