Metals selloff drags markets down

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Global signals

European stocks fell on Tuesday, as mounting doubts over Greece’ bailout and fears of contagion to other euro zone countries upset investors. FTSE 100 was trading lower by 1.02%.

All the major Asian indices closed in the negative territory. Japan’s Nikkei was closed today. SGX Nifty closed 101 points lower.

US stock futures signal weak opening for the Wall Street ahead of earnings of Pfizer, Merck and News Corp, data related to retail sales for April and first voting in US Senate on a sweeping Wall Street reform bill.

Indian indices

The motormen’s strike threw Mumbai out of gear and Mumbaikers had to struggle without its lifeline — the suburban local trains. This disappointed the citizens of Mumbai. The Indian market was no exception as it fell for the second consecutive day and ended deep in red.

Positive economic data from the US helped the Indian market to trade in green. But this upmove did not last long and the market soon turned negative due to continuous selling in metal & realty stocks and rising concerns on Greece’ bailout plan.

Key benchmark index, Sensex that opened 14 points down at 17372 soon turned positive on the back of overnight gain in the US market and touched the day’s high of 17465 in morning trade. However, at noon the Sensex erased its morning gains and turned negative on the back of weak European markets. In the last hour of trading, further fall in European markets and intense selling in metal stocks helped the Sensex tumble further to touch the day’s low of 17102. At finishing line, the Sensex closed 249 points lower at 17137 and the Nifty ended at 5149, down by 74 points.

Market sentiment

The market breadth was extremely negative as declining stocks outnumbered advancing stocks. Of the 2,965 stocks traded on the BSE, 2,096 stocks declined, whereas 778 stocks advanced. Ninety one stocks closed unchanged.

Sectoral & stock screening

Bears drubbed all the sectoral indices, with the BSE Metal tumbling the most, posting loss of 3.93%. Metals saw huge selling pressure following sell-off in global metal companies' shares post Australia imposed 40% tax on mining companies. BSR Realty down 2.76%. BSE HC stood least affected among the 13 sector indices, with loss of 0.48%.

The star stock for the day was Divi’s Laboratories that was up by 3.95%, followed by Shriram Transport Finance Corporation that surged 3.51% and Bajaj Holdings that rose 2.58%. Among laggards Balrampur Chini Mills slid the most by 7.65%, followed by Reliance Natural Resources that fell 7.55% and JSW Steel that shed 6.40%.

Viewing volumes

Anil Dhirubhai Ambani group company and one of the top loser of the day, Reliance Natural Resources saw highest trading on fifth straight day with over 2.64 crore shares changing hands on the BSE, followed by wind turbine major Suzlon Energy (0.46 crore shares), steel maker Ispat Industries (0.45 crore shares), India’s second largest realtor Unitech (0.40 crore shares) and Sesa Goa (0.29 crore shares).