Euro zone euphoria fizzles out

Today's major news

Hindalco Q4 net profit at Rs663.92 crore; the stock sheds 3.28%

Kotak Mahindra Bank Q4 net profit up 97% yoy; the stock closes 2.09% lower

Ranbaxy Laboratories Q1 net profit at Rs871.80 crore; the stock surges 0.88%

Global signals

European stocks retreated after yesterday’s sharp rally as doubts about Greece' ability to smoothly cut its fiscal deficit persisted. As of writing of this report, FTSE 100 was trading lower by 1.71%.

All the major Asian indices closed in the negative territory after registering huge gains in the previous session. SGX Nifty closed 80 points lower.

US stock futures signal lower opening on the Wall Street after registering its biggest one-day gain in over a year. Investors will keep an eye on Walt Disney and Electronic Arts as their earnings will be announced later today.

Indian indices

Yesterday the Indian market had rallied sharply on the news of European Union along with the International Monetary Fund declaring $1 trillion bailout package to stop rising Greece' debt crisis from spreading to other Euro zone as well as other regions of globe. However, today the market failed to continue its momentum, washing away previous session’s gains and declined tracking Asian peers. The markets around the globe turned negative reacting to concerns over implementation of $1 trillion package. Moody's Investors Service, in an unusual move regarding its sovereign ratings process, said on Monday it may downgrade its ratings on Portugal, and Greece' rating could fall to as low as junk. Higher inflation for April 2010 in China raised worries of further monetary tightening in the country. China's consumer prices rose a more-than-estimated 2.8% in April from a year earlier, the fastest pace in 18 months, another data showed industrial production, which surged 17.8% in April from a year earlier, after an 18.1% gain in March.

The Sensex began the session mere six points higher and soon touched the day’s high of 17,379 in opening minutes of the trade. However, it turned negative and expanded its losses. In afternoon session, the Indian market tumbled further mirroring European markets, which rolled back from yesterday’s sharp rally and traded in the negative territory, and along with robust selling in metal and realty counters dragged the Sensex to its day’s low of 17104. At the finishing line, the Sensex quoted at 17142, 189 points lower and the Nifty shut lower by 57 points at 5136.

Market sentiment

The market breadth was negative as declining stocks outnumbered advancing stocks. Of the 2,950 stocks traded on the BSE, 1,756 stocks declined, whereas 1,093 stocks advanced. Hundred and one stocks remained unchanged.

Sectoral & stock screening

All the 13 sectors rallied heavily yesterday. But today was the day of contrast where all the 13 sectoral indices closed lower. BSE Metal and BSE realty fell the most with loss of 2.57% and 2.43% respectively. BSE Bankex, was the lead affected sector, declined marginally by 0.34%.

In ‘A’ group list: Gainers were — the pick of the stock of the day was Rashtriya Chemicals, up 3.83%, followed by Petronet LNG that surged 3.69% and Chambal Fertilisers that rose 3.04%. Laggards were — Piramal Healthcare slid the most by 7.35%, followed by Idea Cellular that fell 5.31% and Reliance Infrastructure that shed 4.96%.

Viewing volumes

Anil Dhirubhai Ambani group company, Reliance Natural Resources saw highest trading on third straight day with over 1.73 crore shares changing hands on the BSE, followed by industrial finance company IFCI (1.09 crore shares), wind turbine major Suzlon Energy (0.56 crore shares), India’s second largest developer Unitech (0.40 crore shares), and chemical and fertiliser company Rashtriya Chemicals (0.34 crore shares).