Sensex slumps on weak results, global cues

Today's major news

Reliance Natural Resources Q1 net profit dips 42% yoy; the stock closes 1.54% down

Bharat Petroleum Corporation Q1 net loss at Rs1,718.10 crore; the stock closes 0.53% higher

Hindustan Construction Company spurts on good Q1 results, bonus issue; the stock closes 3.80% higher



Global signals

The European shares fell on Friday (July 30, 2010) for the third straight day with construction shares among the top losers, as concerns over the US economic growth and downbeat comments from a Federal Reserve official hurt market sentiment.

All the major Asian indices closed in the negative territory. SGX Nifty closed 68 points lower.

The US stock index futures pointed towards a lower opening at the Wall Street on Friday ahead of the second quarter (Q2) US gross domestic product (GDP) data. The investors may focus on the final reading of the University of Michigan consumer sentiment index for July, Chicago PMI for July, and the New York ISM survey for July. The investors will look for results of the companies like Chevron, Aon Corporation and Merck.

Indian indices

The domestic indices closed the session on a weak note owing to unhealthy global clues. The Indian markets posted a weekly decline after gaining over the past three weeks. The results from the index heavyweights like Hero Honda Motors and Oil & Natural Gas Corporation were not so inspiring enough to lift the markets. The benchmark indices - the Sensex and the Nifty - were struggling to stay above their crucial levels of 18000 and 5400 respectively. However, the indices failed to hold those levels at the close owing to weakening of global trend and selling pressure across the board.

The Sensex started the day 11 points lower at 17981 tracking weak US and Asian markets. The index remained in the negative zone throughout the morning session on account of lack of supportive global cues. However in the mid-trade, the Sensex briefly turned positive to hit the day’s high of 18000. In the afternoon session, the index slipped into the red again as the European markets opened lower. In the last hour of trading, the Sensex expanded its losses to hit the day’s low of 17839 as selling intensified in the realty and technology stocks.

At finishing line, the Sensex shut at 17868, 124 points lower. The Nifty closed at 5368, 41 points down.

Market Outlook: Today will be a busy day in the US on economic data front as we have Q2 GDP estimates, Chicago PMI and consumer sentiment on the card. Chevron and Merck will release their earnings report.

Market sentiment

The market breadth was negative. Of the 3,044 shares traded on the BSE, 1,325 shares advanced whereas 1,592 shares trailed. Hundred and twenty-seven shares remained unchanged.

Sectoral & stock screening

Lingering global economic recovery worries dampened the sentiments across the world, which led to selling pressure in all the 13 sectoral indices.

The BSE Realty fell the most by 1.40%, led by the decline in the index heavyweight DLF - down by 2.59%. The BSE TECk slid by 1.22%, followed by BSE capital goods (CG) and BSE information technology (IT) that were down by 1.14% and 1.13% respectively. Rest of the sectors fell in the range of 0.12- 0.89%.

In 'A' group stocks: the top-3 gainers were - Central Bank surged by 10.43% owing to a sharp jump in the quarterly earnings, IRB Infrastructure Developers rose by 7.35% as the company's consolidated net profit surged by 44% and Opto Circuits gained by 7.07%.

The top-3 losers were - MMTC slid by 5.31%, while Petronet LNG and ABB declined by 4.24% and 4.08% respectively as a result of disappointing quarterly numbers.

Viewing volumes

Industrial finance company - IFCI was the most traded share with over 0.98 crore shares changing hands on the BSE, followed by Indian toll road builder - IRB Infrastructure Developers (0.51 crore shares), construction and engineering company - Hindustan Construction Company (0.40 crore shares), telecom major - Tata Teleservices (Maharashtra) (0.26 crore shares) and India’s second largest developer - Unitech (0.25 crore shares).