Markets slip on global weakness

Today's major news

Tata Motors speeds up on robust Q1 numbers; the stock ends 4.17% higher

Rolta FY10 consolidated net profit dips 13%; the stock closes 1.33% down

Nagarjuna Construction Q1 consolidated net profit up 18% yoy; the stock ends 1.13% lower



Global signals

The European shares drifted lower on Tuesday (August 10, 2010), as metal stocks fell on lower metal prices owing to strengthening of dollar ahead of the US Federal Reserve meeting.

All the major Asian indices closed in the negative territory on weak Chinese import data. China’s Shanghai Composite fell by 2.89%.

The US stock index futures pointed a lower opening at the Wall Street on Tuesday ahead of the Fed's policy meet. Investors may focus on wholesale trade for June and earnings of Walt Disney and Semiconductor Manufacturing.

Indian indices

After yesterday’s strong session, the domestic markets dropped in today’s trade on the back of sell-off in technology, telecom, power, metal and healthcare sectors. The benchmark indices retreated from 30-month high levels amid concerns of valuations exceeding the earnings growth outlook. The weak global markets also led to further decline. However, the overseas investment in the Indian equities climbed 54% this year, driving the Sensex to the most expensive in Asia and the BRIC markets, which include China, Brazil and Russia.

ITC, the nation’s biggest cigarette company, declined by 1.6%. Tata Motors, the owner of Jaguar Land Rover, jumped to a record high after returning to profit in the first quarter. On the other hand, the index heavyweight Reliance Industries continued to slide.

The Sensex began the day 15 points lower at 18272. The Sensex briefly turned positive and touched the day’s high of 18293 in its initial trade. As the session progressed, the index slipped again in the morning trade owing to weak Asian markets. The Sensex expanded its losses in the afternoon session to hit the day’s low of 18170 as the European markets opened lower. However, from that level the index pared some of its losses.

At the closing bell, the Sensex shut at 18220, 68 points down. The Nifty closed at 5461, 25 points lower.

Bond Market Update: India’s 10-year bonds were little changed, near their lowest in almost a week, before release of industrial output data for June this week.

Market Outlook: Tonight, all eyes will be on the Fed monetary policy meet. The cash rate may be changed to 0% level from the current 0.25%. But, the Wall Street is now convinced that the Fed will begin to re-implement quantitative easing measures, such as again buying up mortgage securities.

Market sentiment

The market breadth was negative as declining stocks outnumbered the advancing ones. Of the 3,087 shares traded on the BSE, 1,706 shares declined whereas 1,283 shares advanced. Ninety-eight shares traded unchanged.

Sectoral & stock screening

Of the 13 sector indices, three closed higher while ten closed lower. Among gainers, BSE Realty surged the most by 0.53%, while BSE capital goods (CG) and BSE Auto rose marginally. Among losers, BSE information technology (IT) slid by 1.42%, followed by BSE TECk that declined by 1.34% and BSE health care (HC) that fell by 0.79%.

In ‘A’ group stocks, the toppers were - Indiabulls Real Estate up by 5.75%, Educomp Solutions rose by 5.30% and Tata Motors jumped by 4.17% on strong Q1FY2011 numbers. The losers were - Jai Corp slid by 5.87%, MMTC dropped by 3.40% and Aban Offshore fell by 3.39%.

Viewing volumes

Industrial finance company - IFCI was the most traded share with over 0.99 crore shares changing hands on the BSE, followed by India's second largest developer - Unitech (0.70 crore shares), India’s one of the largest car maker - Tata Motors (0.52 crore shares), wind turbine major - Suzlon Energy (0.37 crore shares) and infrastructure firm - IRB Infrastructure (0.30 crore shares).