Chinese dragon pulls down Indian bulls

Today's major news

Maruti Suzuki’s June sales grow by 17.3%; the stock closes 1.70% lower

Food inflation softens to 12.92%

Mahindra & Mahindra’s total sales rise 7% in June; the closes 1.51% down



Global signals

European stocks tumbled on Thursday, falling below the key support level, after tepid Chinese economic data fuelled concerns about the global recovery. FTSE 100 dropped to near ten-month low level.

The major Asian indices closed in the negative territory on the third straight day after data showed that the pace of Chinese manufacturing growth slowed in June as the government steps to cool the property market and curb bank lending. Japan’s Nikkei index hit seven-month low. SGX Nifty closed 60 points lower.

The US stock index futures signal negative opening on the Wall Street on Thursday. The investors await data of the weekly jobless claims, pending home sales for May, as well as the Institute for Supply Management's June manufacturing index.

Indian indices

The domestic markets continued its roller coaster ride, up one day and down another for the fifth straight day. The bears took a firm control as the markets drifted lower tracking feeble global cues.

The world equities tumbled on worries over the Chinese growth as China's Purchasing Manager’s Index fell to 52.1 in June from 53.9 in May 2010, which was slow in pace for the second consecutive month. India’s food inflation easing to 12.92% for the week ended June 19, 2010 and exports rising for the seventh straight month in May 2010 at 35% had no soothing effect on the market sentiments.

The Sensex began the session 22 points lower at 17679 following negative global cues. The index soon widened its losses in the morning session. The index took a beating all through the day. In the afternoon session, the Sensex crashed further to touch the day’s low of 17455 after the European markets opened weak and continuous selling witnessed in the metal and realty stocks. However in late afternoon trades, the Sensex trimmed some of its losses as some buying was seen in defensive sectors like consumer durables and fast moving consumer goods.

At the closing bell, the Sensex shut 192 points lower at 17509. and the Nifty signed off 61 points down at 5251.

Market sentiment

The market breadth was negative as declining shares outnumbered the advancing ones. Of the 2,979 stocks traded on the BSE, 1,449 stocks declined, whereas 1,339 stocks advanced. Hundred and thirty one stocks closed unchanged.

Sectoral & stock screening

Out of the 13 sectors, the defensive sectors like consumer durables (CD) and fast moving consumer goods (FMCG) managed to close marginally higher, with BSE CD and BSE FMCG up 0.26% and 0.07% respectively. The remaining 11 sectoral indices closed in the negative territory. BSE Metal and BSE Realty were the worst hit, down by 1.70% and 1.45% respectively.

Among ‘A’ group stocks’ front, Jain Irrigation was the star stock of the day posted gains of 4.29%, followed by Koutons Retail that surged by 3.32% and Mphasis that rose by 2.97%.

Among losers, Sterlite Industries slid the most by 3.18%, followed by Reliance Communications that fell by 3.03% and Tata Consultancy Services that shed 2.64%.

Viewing volumes

Industrial finance company - IFCI saw highest trading with over 1.67 crore shares changing hands on the BSE, followed by state-run oil refiner - Hindustan Petroleum Corporation (0.51 crore shares), Anil Dhirubhai Ambani Group (ADAG) firm - Reliance Natural Resources (0.50 crore shares), India's largest non-ferrous metals and mining company - Sterlite Industries (0.29 crore shares) and non-banking financial company - Infrastructure Development Finance Company (0.26 crore share).