Weak Wednesday; Markets down for 2nd day

Major headlines

Patni Computer Q3 consolidated net profit dips 14% yoy; the stock ends 0.01% up

Union Bank of India drops on disappointing Q2 results; the stock closes 5.85% lower

Dabur India Q2 consolidated net profit up 15% yoy; the stock closes 1.29% lower



Indian indices

It was not a good day on the Dalal Street. The Indian markets fell for the second straight day as weak global stocks dampened investor sentiment. Selling in realty, fast moving consumer goods (FMCG) companies’ stocks and index heavyweights dragged the Sensex and the Nifty below significant levels of 20000 and 6000 respectively during the day. The indices closed sharply lower on huge volumes but managed to settle above their psychologically important levels.

Among index heavyweights, ICICI Bank, Larsen & Toubro, HDFC Bank, Housing Development Finance Corporation, NTPC and Reliance Industries edged lower. Mahindra & Mahindra, State Bank of India and Reliance Communications supported the markets.

The Sensex started the session mere one point lower at 20220 and also its day’s high. The index slipped from its day’s high and remained in a narrow range, with a negative bias throughout the morning session. The Sensex continued its downward trend in afternoon trades as the European markets traded weak. As the session progressed, the index hit the day’s low of 19923 as intensive selling pressure was seen in realty, FMCG stocks along with index heavyweights. In last hour of trades, the Sensex trimmed some of its losses to close above 20000 levels.

At the finishing line, the Sensex shut the session at 20005, lower by 216 points. The Nifty closed at 6013, down by 69 points.

Bond and Rupee Update: India’s ten-year bond yields were near a two-year high on speculation that banks have fewer funds to invest in debt after borrowing rose. India’s rupee declined to the lowest level in two weeks as Asian stocks dropped and on speculation that overseas investment will slow after the completion of the nation’s record share offering.

Market Outlook: In the US tonight, we have new home sales numbers and durable goods figures, and earnings of ConocoPhillips, Proctor & Gamble (Dow), Whirlpool, Volkswagen and Brazilian iron ore giant Vale.

Market sentiment

The market breadth was unconstructive as declining stocks outpaced the advancing ones. Out of the 3,068 stocks on the BSE, 1,727 fell while 1,213 rose. Hundred and twenty-eight stocks traded unchanged.

Sectoral and stock screening

Of the 13 sector indices, only two sectors managed to close higher. BSE Consumer Durables (CD) surged by 0.44% and BSE Metal rose by 0.28%. BSE Realty was the worst hit, fell by 2.07%, followed by BSE FMCG that declined by 1.61% and BSE Bankex declined by 1.19%.

Looking into 'A' group stocks, Hindustan Oil Exploration surged the most by 5.10%, followed by Jet Airways that rose by 4.85% and JSW Steel gained by 4.26%. On the losers’ side, Union Bank of India lost the most by 5.85% on weak Q2 numbers, followed by Indiabulls Real Estate that slid by 4.35% and Rashtriya Chemicals & Fertlisers fell by 4.04%.

Viewing volumes

Industrial finance company - IFCI was the most traded, with over 0.53 crore shares changing hands on the BSE, followed by leading two-wheeler manufacturer - TVS Motors (0.23 crore shares), public sector bank - IDBI Bank (0.23 crore shares), PSU bank - UCO Bank (0.18 crore shares) and India's leasing steel producer - Tata Steel (0.18 crore shares).

Global signals

The European equities traded mixed, recovering earlier losses as banking stocks gain after strong results from Deutsche Bank.

All the major Asian markets closed on a negative note, except Japan’s Nikkei index that ended with marginal gains of 0.10%.

The US stock index futures point to a lower opening on the Wall Street. The earnings of ConocoPhillips, Proctor & Gamble, Whirlpool, Volkswagen and Brazilian iron ore giant Vale will be eyed. On macro front, the data released will be September's durable goods figures and new home sales numbers.