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Friday, June 01, 2012

June gets a Bumpy start; Sensex tumbles 253 points

The Indian markets ended nearly 2% down on the first day of the June series due to weak European cues. The Sensex declined 253 points and the Nifty ended 83 points lower. Major Headlines IGL vs PNGRB; Delhi High courts favours IGL TVS Motors May 2012 sales numbers disappointing Maruti May 2012 domestic sales at 89478 units Auto sector down by 2% post May sales Hotel shares fall as government takes austerity measures Indian Indices Indian equity benchmarks fell sharply during the afternoon session on the first day of the June series, following the losses in Asian markets and weakness across the European markets. The BSE Sensex and the NSE Nifty dipped nearly 2% each. The broader indices were also in red, heading towards a weak market breadth. Profit booking led the markets to close the session lower. Major heavyweight draggers were - RIL, HDFC Bank, Infy, L&T, HDFC, Tata Motors, ONGC. All-round selling across the board also led the markets to trade with heavy losses. All the sectors closed in the red zone. The Sensex fell below the psychological mark of 16000 and the Nifty fell below 4850 mark. The broader market too ended trade on a negative note. At the end of day, the BSE Midcap index declined by 1.56%, while the BSE Smallcap index was down by 1.29%.

News flow from euro-zone to dictate near term trend

News flow from euro-zone will continue to dictate near term trend on the domestic bourses as risk aversion arising from euro-zone debt worries rattled global markets in the month just gone by. The barometer index, BSE Sensex, lost 6.35% in May 2012 on euro-zone debt worries. Concerns about Greece's possible exit from the European Union rattled global equity markets after the splintered results of a parliamentary election on 6 May 2012 left no party able to put together a government. That led the country to call another election on 17 June 2012. Automobile and hotel stocks may slide after the government on Thursday, 31 May 2012, announced a series of austerity measures in the context of the current fiscal situation where there is a tremendous pressure on government's resources. The finance ministry has banned purchase of new vehicles until further orders, including against condemned vehicles. The finance ministry also announced a ban on holding meeting and conferences at five-star hotels.

Market slips on weak GDP data, euro-zone debt worries

The market fell last week after India's weak economic growth spooked investors. Concerns about Greece's potential exit from the euro-zone also made investors jittery. Trading was volatile throughout the week as the May 2012 derivatives contracts expired on Thursday, 31 May 2012. The barometer index, BSE Sensex fell 252.66 points or 1.56% to 15,965.16. The 50-unit S&P CNX Nifty fell 78.80 points or 1.60% to 4,841.60. The BSE Mid-Cap index outperformed the Sensex, falling 1.34% and the BSE Small-Cap index underperformed the Sensex, falling 1.96%. Foreign institutional investors (FIIs) sold shares worth net Rs 347.10 crore in May 2012 so far (till 30 May 2012). FIIs had sold shares worth net Rs 1109.10 crore in April 2012. FIIs have bought shares worth net Rs 42494.40 crore in calendar 2012 so far (till 30 May 2012). FIIs had offloaded shares worth a net Rs 2714.20 crore in 2011. India's economy grew at a much lower than expected annual rate of 5.3% in Q4 March 2012, largely due to a decline in manufacturing output, the latest data showed. The data showed that the manufacturing sector shrank 0.3% in the quarter compared with a year earlier. The farm sector grew 1.7%. GDP growth for the year ended March 2012 was at 6.5%, lower than the government's projection of a 6.9% expansion.

Sensex hits over one-week closing low below 16,000

Key benchmark indices fell for the third straight day to hit their lowest closing level in over a week as global stocks faltered as investors dumped risky assets after data showing downbeat manufacturing activity from China to Europe raised doubts about global economic recovery. Reports indicating that monsoon rains over India's mainland will be delayed by about four days also weighed on sentiment. The barometer index, BSE Sensex fell below the psychological 16,000 mark. The Sensex was down 253.37 points or 1.56%, off close to 260 points from the day's high and up about 30 points from the day's low. The market breadth was weak. From a recent high of 16,438.58 on 29 May 2012, the Sensex has declined 473.42 points or 2.87% in three trading sessions. The Sensex shed 1,100.28 points or 6.35% in May 2012 on euro-zone debt worries. The barometer index has gained 510.24 points or 3.3% in calendar 2012 so far (till 1 June 2012). From a 52-week low of 15,135.86 on 20 December 2011, the Sensex has risen 829.30 points or 5.47%. From a 52-week high of 19,131.70 on 8 July 2011, the Sensex has lost 3,166.54 points or 16.55%.