Pipped at the post, Sensex fails to hold 18K

Today's major news

Inflation rises to 10.55% in June

Larsen & Toubro wins contract worth Rs376 crore; the stock closes 2.49% higher

Housing Development Finance Corporation's Q1 net profit surges 23% yoy; the stock ends 0.47% higher



Global signals

The European shares turned negative on Wednesday (July 14, 2010) erasing its morning gains as banks lost ground on concerns about stringent rules for the sector.

All the major Asian indices closed in the positive territory with Japan’s Nikkei index jumped 2.71%. SGX Nifty closed 38 points lower.

The US stock index futures signal higher opening at the Wall Street on Wednesday, boosted by upbeat earnings from the technology firm Intel. The investors will closely watch US retail sales figures for June.

Indian indices

The Indian equity benchmarks, the Sensex and the Nifty, were trading strong above their psychological levels of 18000 and 5400 respectively. It indicated that the indices will continue its northward journey till the end. However, this did not turn up and the domestic indices closed below their psychological levels to cut its four-day advance. The market sentiments turned bearish as the European markets shifted into negative zone and below market expectation Q1 earnings posted by Housing Development Finance Corporation (HDFC).

India’s inflation rose to 10.55% for June as compared to 10.16% seen in the previous month. The domestic indices fell prey to rising inflation worries that might put pressure on the Reserve Bank of India to hike rates in the quarterly monetary policy review slated on July 27, 2010. The information technology (IT) stocks were under pressure for the second consecutive day post Infosys Technologies poor Q1 results.

The strong global cues lifted the Sensex above 18000 levels at the start, up 39 points. The index soon hit its 52-week high level of 18167 in the morning trades. However, the Sensex could not sustain that level and trimmed its gains in the late morning session after inflation back home rises. In the last hour of trade, the Sensex erased all its gains and turned negative to touch the day’s low of 17897.

At closing, the Sensex failed to hold 18000 levels and closed the day below those levels at 17938, 48 points lower. The Nifty also ended below 5400 levels at 5386, 15 points down.

Market Outlook: For tomorrow (July 15, 2010), the market participants would closely watch the retail sales data in the US, some key corporate results to be announced and Asian markets

Market sentiment

The market breadth was negative. Of the 3,043 shares traded on the BSE, 1,657 shares declined whereas 1,261 shares advanced. Hundred and twenty-five shares remained unchanged

Sectoral & stock screening

Of the 13 sectoral indices on the BSE, eight ended in the red while five closed in the green. The sectors that were hit the most - BSE IT lost by 1.35%, followed by the BSE TECK that declined by 1.10% and rest of the sectors dropped in the range of 0.21% to 0.91%. The gaining sectors’ were - BSE capital goods (CG) gained by 1.13%, BSE consumer durables (CD) advanced by 0.62% and BSE Bankex surged by 0.28%, while BSE Power and BSE Realty were up marginally by 0.01% each.

On ‘A’ group stocks’ front, the top gainers’ were - IRB Infrastructure surged the most by 3.39%, followed by Castrol India that rose by 3.31% and GVK Power & Infrastructures that jumped 2.94%. The top losers’ were - Jet Airways was hit the most by 4.71%, followed by Marico that slid by 3.56% and Jubilant Organosys that fell by 2.84%.

Viewing volumes

India’s second largest developer - Unitech saw highest trading with over 0.90 crore shares changing hands on the BSE, Anil Dhirubhai Ambani Group (ADAG) firm - Reliance Natural Resources (0.86 crore shares), industrial finance company - IFCI (0.63 crore shares), wind turbine major - Suzlon Energy (0.47 crore shares) and power & infrastructure firm - GVK Power & Infrastructure (0.31 crore share).