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Friday, June 08, 2007

Bears fight off two comeback attempts


Bulls failed twice Friday in their come back attempt. Once, after inflation came in lower than expected at 4.85%. And second on back of IT shares with the rupee easing against the dollar.

The Bombay Stock Exchange’s Sensex ended 122 points or 0.86% down at 14064 and the National Stock Exchange’s Nifty finished 30 points or 0.71% down at 4149.

Weak global cues did little to help. Tokyo's Nikkei 225 closed at 17779, down 274 points or 1.5%. Australia and South Korea closed 1% down.

European stocks were mostly lower, as a sell-off in bonds continued to exert pressure. London’s FTSE-100 lost almost 11 points or 0.2% at 6494.2. Paris CAC-40 Index was at 5882, almost 8 points or 0.1% lower. Frankfurt’s DAX was 23 points down at 7595.

“Selling pressure in heavyweights lowered indices. Markets across the globe are correcting, and that effect is seen here also. FIIs too are selling. The market is weak and a further downside cannot be ruled out,” said Hitesh Sheth, head of technical research at brokerage Prabhudas Lilladhar.

Barring technology and oil and gas, all other sectors posted losses.

ACC, Tata Steel, HDFC, Maruti Udyog, Tata Motors, Hero Honda, Ranbaxy, Dr Reddy’s, ITC and BHEL were the biggest losers on Sensex. Gainers were Hindalco, Satyam, ONGC, TCS and Wipro.

Auto and steel stocks were under pressure, and that is likely to continue next week also,” Sheth said.

Maruti Udyog was down 3.2% at Rs 737, Mahindra and Mahindra lost 2.7% at Rs 720, Hero Honda slid 2.4% to Rs 681 and Tata Motors was 3.5% lower at Rs 654. Tata Steel fell 4.8% to Rs 586, SAIL was down 4.1% at Rs 125 and Jindal Steel was 1.9% lower at Rs 3,467.

“Selective mid-cap stocks were stronger as FIIs are pumping money into them. Aurobindo Pharma, Dena Bank and BASF India saw strong volume today,” he added.

Aurobindo Pharma gained 4.20% at Rs 757, Dena Bank rose 7.9% to Rs 48 and BASF climbed 4.51% to Rs 270.

The BSE Mid-cap Index was down 32 points or 0.51% at 6156 and BSE Small-cap Index was 46 points or 0.62% lower at 7345.

“The market fell sharply this week, but the velocity of the down slide expected next week will recede,” Sheth said.

“The Sensex faces resistance at 14,300, while it could go down to 13,900-13,600 levels in the next couple of weeks. The Nifty has support at 4100-4000 levels,” he said.