The FIIs were net sellers with sales worth Rs 270.38 Cr (prov. cash market fig).
Indian markets dropped on Wednesday erasing earlier gains. After trading strong in the first half, markets plunged in the later to close deep in the red after touching a low of 18,898.56. Metal stocks, led by SAIL, gained coupled with Realty stocks while IT stocks, except HCL Tech witnessed some profit booking. Capital Goods stocks continued their southern journey. European markets, slipped after a positive opening and were trading modestly in the negative.
At the close, the benchmark 30-share index, BSE Sensex lost 113.73 points or 0.60% at 18,978.32 with 21 components posting drop. Meanwhile, the broad based NSE Nifty fell by 33 points or 0.58% at 5,691.05 with 36 components posting drop.
Amar Ambani, Head of Research, IIFL said, "Auto major Bajaj Auto, Mid-Cap IT heavyweight HCL Tech and Hindustan Zinc announced better than expected quarterly results. However, the market seemed to be more worried about the governance deficit, high inflation and FII outflows. All eyes are on next week`s RBI review and forthcoming results from the leading companies such as Wipro, Yes Bank, RIL, ITC, BHEL, PNB and Tech Mahindra".
Sensex Movers: Infosys Technologies contributed fall of 39.35 points in the Sensex. It was followed by Reliance Industries (30 points), Larsen & Toubro (22.12 points), State Bank Of India (16.84 points) and HDFC Bank (14.21 points). However, ICICI Bank contributed rise of 18.14 points in the Sensex. It was followed by Hindalco Industries (10.24 points), Sterlite Industries (India) (10.24 points), Tata Steel (5.76 points) and DLF (4.34 points).
Biggest gainers in the 30-share index were DLF (3.13%), Sterlite Industries (India) (2.74%), Reliance Energy (2.71%), Hindalco Industries (2.63%), Bajaj Auto (1.96%), and ICICI Bank (1.24%).
On the other hand, Infosys Technologies (1.99%), Larsen & Toubro (1.87%), State Bank Of India (1.86%), HDFC Bank (1.48%), Hero Honda Motors (1.46%), and Reliance Industries (1.32%) were the major losers in the Sensex.
Mid & Small-cap Space: The BSE Mid and small caps outperformed their larger counterparts gaining 0.15% and 0.09% respectively. The major gainers in the BSE Midcap were Andhra Bank(3.37%), Allcargo Global Logistics (3.23%), Amara Raja Batteries (1.35%), Alfa-Laval (India) (0.53%) and Amtek Auto (0.36%).
The major gainers in the BSE Smallcap were Ajanta Pharma (3.11%), AK Capital Services (2.88%), INEOS ABS (India) (1.41%), Abhishek Industries (0.98%) and ABG Infralogistics (0.18%).
Sectors in Limelight: The Capital Goods index was at 13,517.77, down by 163.99 points or by 1.2%. The major losers were ABB (1.56%), Havell`S India (1.15%), Alstom Projects India (0.86%), Areva T&D India (0.53%) and Bharat Heavy Electricals (0.52%).
The IT index was at 6,641.65, down by 79.11 points or by 1.18%. The major losers were Infosys Technologies (1.99%), Core Projects and Technologies (1.39%), Wipro (0.85%), Tata Consultancy Services (0.58%) and Tech Mahindra (0.52%).
The Oil & Gas index was at 9,817.20, down by 114.21 points or by 1.15%. The major losers were GAIL (India) (2.01%), Oil & Natural Gas Corporation (1.2%), Bharat Petroleum Corporation (0.79%), Cairn India (0.1%) and Indian Oil Corporation (0.1%).
On the other hand, the Metal index was at 16,822.59, up by 293.87 points or by 1.78%. The major gainers were JSW Steel (3.61%), Sesa Goa (2.96%), Hindalco Industries (2.63%), Bhushan Steel (1.1%) and NMDC (0.66%).
Market Breadth: Market breadth was negative with 1,460 advances against 1,449 declines.
Value and Volume Toppers: Tata Coffee topped the value chart on the BSE with a turnover of Rs. 2,749.80 million. It was followed by LIC Housing Finance (Rs. 1,919.40 million), State Bank Of India (Rs. 1,691.98 million) and Orchid Chemicals & Pharmaceuticals (Rs. 1,293.70 million).
The volume chart was led by Shree Ashtavinayak Cine Vision with trades of over 84.57 million shares. It was followed by LIC Housing Finance (11.26 million), Ispat Industries (8.84 million) and Sanraa Media (4.90 million).
VIEWS FROM DIFFERENT BROKING HOUSE:
Nirmal Bang: From the Options data, the 5,600 Put and 5,500 Put have the highest open interest and on the Call side, 5,800 has the highest open interest base. The Put Call Ratio (PCR) for the Nifty stands at 0.93, indicating further writing of Put Options seen at the 5,700 strike price. The January series is trading with very low premiums, stating that there is a lot of uncertainty in the markets due to domestic factors. A major up move could be seen only if the Nifty holds above the 5,900 level in the near term. The Nifty daily chart is about to enter the oversold region as the RSI is at 32.7, indicating that the markets could possibly make a bottom around the 5,600 – 5,515 region.
Vikas Pershad of Veda Investments felt a fall to 5300-5000 is quite possible in the current scenario given that it is just 5-6% away. “Indian market can do that in a day sometimes. You should be prepared for that—just as you should be prepared for 5-7% rise in the other way".
Jai Bala, Chief Market Technician at cashthechaos.com felt the bloom is off the rose for the Nifty. According to him, “The decline has happened in five leg fashion. When a market declines in a five leg fashion it normally is an indication that it is part of a larger decline. People are actually looking at global cues only from the US, UK and the DAX and the stock exchanges and the main stock exchanges—they are not looking at the peripheral stock markets.” He further explained, “If you took the Peru market, which did outstandingly well in 2010, if you took Columbia, which did outstandingly well in 2010, if you took Indonesia, and Philippines—they also got slammed just like the Indian Nifty. This is not just an isolated case where India is going down".
ICICI Securities said, "The recent market correction in the first half of January has provided investors an opportunity to invest in a staggered way. From current levels, every dip should be utilized by investors to invest in equity markets. The appetite for equity investment from domestic institutional investors at lower levels seems strong Global news flows regarding tightening monetary policy to prevent rising inflation and sovereign risk may have a negative impact on the global equity markets. Higher commodity prices, including crude, are a major concern for the Indian economy. Foreign institutional flows may be volatile on global news flows. This may have its impact on Indian markets as they continue to be dominant market participants India`s domestic economy continues to remain on a strong footing with visible growth prospects. The same is expected to drive the equity market over a longer period of time Investors should avoid taking high cash call as fund managers themselves manage the portfolio in accordance with market development. Large cap biased funds offer a better risk adjusted opportunity for investors dominant market participants".
It also added "In the short-term, volatility is expected as markets will take cues from the third quarter results and foreign liquidity flows. For CY11, we expect the performance of the Indian equity market to be growth induced. It would mirror the trajectory of economic and corporate profitability growth".
Puneet Kinra - senior technical analyst (Equity Research), Bonanza Portfolio, while opining on the outlook said, "Nifty showed good strength in the initial session, however could not cross above resistance of 5,750 level. Volatility is likely to continue till Nifty sustains well above 5,850 level and also because of upcoming quarterly results".
Avinash Gupta, V P- Research Equity, Bonanza Portfolio: "Results of Wipro and Kotak Mahindra Bank are due tomorrow. Any surprise in the results of the heavyweights will have an impact on the market sentiment. The market is expected to consolidate in a range of 5,550/5,800".
Mileen Vasudeo, technical analyst, Angel Broking House said, "Markets were unable to sustain early hour gains and witnessed selling in the later half of the session to close in red. On the daily chart, we are observing that prices are hovering above the 200-day SMA (18,674/5,600 levels) but the bias is on the negative side".
Note: Some datas and comments are taken from Moneycontrol and NSE site.
