Bloodbath in small, midcaps; Gujarat polls weigh on bourses


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By S Jha

New Delhi, November 10: With approaching Gujarat Assembly elections, the Indian stock markets plunged in deep red on a second day in a row, with bloodbath seen in the small and midcap companies, while even the large scrips were battered. The Gujarat-based companies came under heavy selling pressure, while there was a rout among the pharma companies.

The stock market crash in India was in contrast to stable to positive global equity markets, as the Dow Jones was higher by over two per cent in the Thursday afternoon trade. The rout in the pharma companies, which are majorly based out of Gujarat, was most noticeable.

Aurobindo Pharma, a Hyderabad-based company, was in deep red, with a cut of almost 12 per cent after one of its promoters were arrested by the Enforcement Directorate, while the full details of the case are not yet known. Piramal Health also faced the rout, with a cut of over eight per cent. Gland Pharma was also down by over four per cent. Ind-Swift Laboratories was also down by over four per cent.

Significantly, a number of Gujarat-based companies have come under massive selling pressure in the recent days. Deepak Nitrite, which is from Gujarat, was down by almost 10 per cent. Gujarat Alkali and Chemical was down by over seven per cent on Thursday.

There was massive selloff in the small and midcaps, as scrips which recently had rallied in the last few days were under pressure such as Garden Reach Shipbuilders, D-Link India, Centum Electronics Deepak Fertilizers. Quess Corp and TeamLease were hammered as both lost over 10 per cent on bourses on Thursday.

The auto sector led by Tata Motors and Mahindra and Mahindra dragged the broader market. Barring HDFC Bank and Kotak Mahindra Bank, the banking scrips too came under pressure. The metal index too followed the general trend. While the FIIs bought into the Indian equity markets, with a nominal amount, the domestic institutional investors have been heavily selling for the last few days.

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