SENSEX SLIPS FROM RECORD HIGHS ON PROFIT BOOKING

The benchmark Sensex fell for the first time in four days today, dropping 71 points amid profit booking a day after an election-fuelled rally took it to a record high. NTPC, the nation's biggest power generator, was the biggest loser on the index. It fell 11.26 per cent on concerns proposed electricity tariff regulations would have a negative impact on the utility. Power stocks led the decline among seven BSE sectoral indices including capital goods, bank and realty. IT, FMCG and metal stocks advanced, helping to limit the drop in the index.
The 30-share S&P BSE Sensex resumed lower and tumbled over 151 points to a low of 21,175.08. Buying in select stocks helped the index to recover and end at 21,255.26, a fall of 71.16 points or 0.33 per cent. In the previous three sessions, the Sensex had gained 617.71 points or 2.98 per cent.

The broader 50-share CNX Nifty on the National Stock Exchange dropped 31.05 points, or 0.49 per cent, to 6,332.85. "Following the recent gains, today the index saw profit booking from higher levels and consolidated above 6,300 level," said Rakesh Goyal, Senior Vice President at Bonanza Portfolio Ltd. "However, one can expect market volatility due to profit booking and political news." NTPC plunged after the Central Electricity Regulatory Commission issued draft regulations for tariff determination during FY15-19 applicable to government companies. "The final regulations could be different from the draft as has happened in the past. However, given the quantum of negative impact is high compared to previous draft regulations even if the norms are relaxed a bit it would still be negative," brokerage Emkay Global said in a report. Global rating agency Fitch today said the setback faced by the Congress Party in state elections could potentially raise political pressure on the government's near-term fiscal goals. It could mean an increasing likelihood of political pressure to limit expenditure cut-backs.