Markets retreat from 33-month high

Major headlines

Axis Bank Q2 net profit up 38% yoy; the stock closes 1.59% lower

LIC Housing Q2 net profit zooms 37% yoy; the stock ends 0.96% higher

Godrej Consumer gallops on merger nod; the stock closes 2.79% up



Indian indices

Bears were back on the Dalal Street as the Indian markets fell from close to a record high as some investors judged that the recent rally has surpassed the outlook for earnings. The markets were trading choppy since the morning session, as the markets seemed to consolidate after reaching its all-time high. The markets closed with significant losses after profit booking took its toll. The Nifty broke 6200 levels and closed below that levels.

Larsen & Toubro, the largest engineering company, dropped the most in more than three months. The markets were hit by intense selling pressure with the capital goods sector performing the worst. With the expectation of good quarterly numbers, information technology sector closed in the green, followed by metal. Reliance Industries, ICICI Bank and State bank of India closed with significant losses.

The Sensex began 13 points higher at 20700. The index picked up pace and hit the day’s high of 20854 tracking gains across the globe. However, the Sensex soon slipped from its day’s high and started to trim its gains. The Sensex hovered between the positive and negative terrain throughout the morning session. In the afternoon session, the Sensex traded in the red and hit the day’s low of 20443 as selling pressure witnessed in capital goods, oil & gas stocks and in index heavyweights.

At the closing bell, the Sensex shut shop at 20498, lower by 190 points. The Nifty closed at 6177, down by 57 points.

Bond and Rupee Update: India’s rupee climbed for the third time this week on speculation that planned share and bond sales by local companies will attract investment from overseas. India’s ten-year bonds gained for the first time in six days on speculation that yields at their highest level in almost seven weeks will lure investors.

Market Outlook: In the US, Google's result will be out after the bell tonight. During the session, the monthly producer price index and the trade balance data will be released.

Market sentiment

The market breadth was unconstructive as falling stocks outpaced the gaining ones. On the BSE, out of the 3,099 stocks, 1,799 stocks fell while 1,155 stocks rose. Hundred and forty-five stocks remained unchanged.

Sectoral & stock screening

Of the 13 sector indices, three closed higher while ten closed lower. Among gainers, BSE Information technology (IT) surged the most by 0.55%, while BSE Metal and BSE TECk rose by 0.48% and 0.11% respectively. Among losers, BSE Capital Goods (CG) slid by 1.94%, followed by BSE Oil & Gas that declined by 1.54% and BSE Power fell by 1.24%.

In 'A' group stocks, the toppers were - Rashtriya Chemicals up by 12.77%, Coromandel International rose by 6.59% and National Fertilizers jumped by 6.53%. The losers were - Bharat Petroleum Corporation slid by 4.85%, IFCI dropped by 4.48% and Areva T&D fell by 4.05%

Viewing volumes

PSU fertilizer firm - Rashtriya Chemicals & Fertilizers was the traded the most, with over 0.66 crore shares changing hands on the BSE, followed by Industrial finance company - IFCI (0.54 crore shares), India's second largest developers - Unitech (0.45 crore shares), wind turbine major - Suzlon Energy (0.39 crore shares) and a public sector bank - Vijaya Bank (0.33 crore shares).

Global signals

European shares climbed to their highest in more than five months, with growing expectations of more US monetary easing and hopes of a robust earnings season boosting demand for riskier assets.

All the major Asian indices closed in the positive territory except Straits Times. Japan's Nikkei index surged by 1.91%.

The US stock index futures point to a higher opening on the Wall Street tonight ahead of the weekly initial jobless claims, the producer price index for September and international trade for August. The investors will keep an eye on the earnings of Google, Advanced Micro Device and Safeway Inc.