MARKET OUTLOOK ( POST-SESSION : 17/06/2011 )
Markets ended the last trading session of the week on a subdued note as the benchmark indices market its third straight sessions of losing streak. The Asian finished off the session on a downbeat note as the technology stocks plunged on concerns over earnings prospects. The Chinese stocks fell on concerns over faltering consumer spending in the country. Further, the booming property market across Asia was seen declining as the government’s across the continent raised interest rates to tackle high inflation. Besides, the rising concerns over the worsening Greek debt crisis had dampened the sentiment across Asia.
After opening on the positive terrain, the benchmark indices were seen plunging below the base line soon as the IT space declined significantly. A rangebound movement was witnessed till the mid-session post which a fresh bout of selling dragged the market to the lowest point of the session. The benchmark Nifty was dragged near the 5,350 level as the IT, Oil&Gas and Healthcare space faced hefty sell offs. The IT giant TCS declined by 3.58%, while Infosys dragged by 1.29%. Further, Sensex heavyweight Reliance Industries plunged by 2.21%, hitting a fresh 52-week low amidst reports stating that a government regulator has accused the Oil Ministry for favouring the company in doubling the development cost of its KG-D6 gas field. Finally, the benchmarks settled near their respective intraday lows. The negative opening for the European markets had further dampened the sentiment among the domestic stocks.
In the sectoral front, the IT, Oil&Gas, Healthcare, and Auto took the major hammering during the session, losing by 1.94%, 1.56%, 1.29% and 1.07%, respectively. Both the Nifty and Sensex were seen trading on a downbeat note throughout the session and finally closed with more than 0.50% losses each. The mixed closing for the overnight US market has limited impact on the domestic sentiment during morning trade. The Dow Jones Industrial Average (DJIA) closed with a gain of 64.25 or 0.54% at 11,961.52 while NASDAQ index finished down by 7.76 points or 0.29% to 2,623.70. The S&P 500 (SPX) closed higher by 2.22 points or 0.18% to 1,267.64.
Among the Sensex pack, 18 stocks ended in negative while 12 stocks ended in the positive terrain. The overall market breadth showed similar weakness, as out of total 3,018 stocks traded on BSE, 1,946 stocks declined, whereas 957 stocks advanced and 115 stocks remained unchanged.
The BSE Sensex closed at 17,870.53, down by 115.35 points or by 0.64% and the NSE Nifty closed at 5,366.40, down by 30.35 points or by 0.56%. The BSE Midcap was at 6,814.79 down by 56.96 points or by 0.83%, whereas the BSE SmallCap closed at 8,174.49, down by 75.49 points or by 0.92%. The BSE Sensex touched intraday high of 18,064.76 and intraday low of 17,844.09.
The top gainers of the BSE Sensex pack were Tata Steel Ltd. (Rs. 572.25,+3.45%), Bharti Airtel Ltd. (Rs. 380.35,+2.58%), Reliance Communications Ltd. (Rs. 95.10,+1.49%), Reliance Infrastructure Ltd. (Rs. 580.50,+0.97%) and NTPC Ltd. (Rs. 178.70,+0.93%), among others.
The top losers of the BSE Sensex pack were Tata Consultancy Services Ltd. (Rs. 1110.50,-3.58%), Reliance Industries Ltd. (Rs. 868.40,-2.21%), Mahindra & Mahindra Ltd. (Rs. 644.95,-2.02%), Hindalco Industries Ltd. (Rs. 169.85,-1.96%) and Maruti Suzuki India Ltd. (Rs. 1167.40,-1.85%), among others.
On the macroeconomic front, Comptroller & Auditor General of India has agreed to do special audit of certain blocks/fields operated under Pre-NELP and NELP regimes. CAG took the decision of special audit on the back of request of Ministry of Petroleum & Natural Gas in November 2007.
The Indian Finance Minister, Pranab Mukherjee stated that continued monetary tightening by the Reserve Bank of India might hamper economic growth in the short-term. While addressing a banking conclave organised by Assocham Mukherjee said, “Monetary measures may moderate growth rate in the short-term if it continues”. However, he remains optimistic about the long term growth prospects of the country.
On the global markets front, almost all the major indices in Asia closed on a negative note. The Hang Seng, Shanghai Composite, Seoul Composite, Nikkei225 and Taiwan Weighted declined by 1.17% at 21,695.26, 0.77% at 2,643.65, 0.72% at 2,031.93, 0.64% at 9,351.40 and 0.21% at 8,636.10, respectively.
The European markets, which opened after the Indian market were trading on a mixed note, after opening in the negative terrain. Key benchmark indices like – FTSE 100 decreased by 0.10% at 5,693.16. On the flipside, in Frankfurt, the DAX index was trading up by 0.44% at 7,141.70 and the CAC 40 index was trading higher by 0.81% at 3,823.01. The BSE IT index was at 5,818.66 down by 115.36 points or by 1.94%. The major losers were Tata Consultancy Services Ltd. (Rs. 1110.50,-3.58%), Patni Computer Systems Ltd. (Rs. 337.70,-3.56%), Oracle Financial Services Software Ltd. (Rs. 2183.55,-3.37%), Wipro Ltd. (Rs. 409.00,-1.64%) and HCL Technologies Ltd. (Rs. 481.00,-1.54%).
The BSE Oil&Gas index was at 8,974.97 down by 142.08 points or by 1.56%. The major losers were Cairn India Ltd. (Rs. 325.00,-2.34%), Reliance Industries Ltd. (Rs. 868.40,-2.21%), Petronet LNG Ltd. (Rs. 140.20,-2.16%) and Oil & Natural Gas Corporation Ltd. (Rs. 265.10,-1.54%) and Oil India Ltd. (Rs. 1262.30,-1.02%).
On the corporate front, shares of Jyoti Structures Ltd surged by 2.03% to Rs 88.00, after reports stated that the company has bagged an order worth Rs 317 crore for turnkey execution of substation and distribution works for Maharashtra State Electricity Distribution & Transmission companies. It further received an order worth Rs 169 crore from Jaiprakash Power Ventures for 400KV transmission line.