Sensex takes a breather...

After enjoying a pleasant rebound over the past six trading sessions, the Indian markets finally took a breather on Friday. The six-day rally came to a halt after traders and investors preferred to book some profits at higher levels. Data showing deceleration in manufacturing sector activity from Australia to Europe also partly contributed to the selling today. Back home, trade deficit widened in May as well as in April-May period. Monthly auto sales also came in mixed, with Maruti's volumes sliding on a 10-day strike.



While the end was subdued for the Large-Cap shares, the start was good, as has been the case in the past few days. But the momentum started easing from late morning with the two indices hitting the day's low in mid afternoon. Earlier, the BSE Sensex and the NSE Nifty had surpassed crucial levels of 19,000 and 5,700, respectively.

Profit booking set in as the Nifty was inching towards the critical 200-DMA, which is placed at 5747 levels. Index heavyweights like Reliance Industries, Bharti Airtel, HUL, Maruti and M&M were among the major laggards in the two indices. While on the other hand, DLF, Cairn India and Hindalco managed to buck the negative trend.

Among the BSE sectoral indices, the BSE Realty index was the top gainer, rising ~3%, while BSE IT index rose ~0.8% and the BSE Metal index was up ~0.6%. On the other hand, the BSE Oil & Gas and the Consumer Durables indices were among the top losers, losing 1.8% and 0.8% respectively.

Notwithstanding Friday's minor fall, the Nifty ended with smart gains for the second week in succession. The index gained ~3% during the week.

"In the coming weeks, Q1 FY12 corporate earnings will likely drive the sentiment in July. FII flows will also be crucial as part of the current rally was driven by overseas investors. While the market has sprung a positive surprise, one could do with some surprisingly couragious and bold policy action on the part of the Government. Inflation and monetary policy will remain in focus in July, especially after the recent fuel price hike. Global data points and crude oil prices will continue to have a bearing on the mood in Indian markets," says Amar Ambani, Head of Research, IIFL - India Private Clients.

The BSE Sensex ended at 18,761 losing 83 points. It had earlier touched a day's high of 19,031 and a day's low of 18,713. It opened at 18,974. The NSE Nifty closed at 5,627 losing 20 points.