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Markets take another beating

This article was posted on Feb 10, 2011 and is filed under Market News

The markets continued their southbound journey in this session, nullifying the short-lived attempt at a pullback midway through the session. The Sensex kissed positive territory for a brief instance in the afternoon, only to come off and end lower by 129 points at 17463 and the Nifty shut shop at 5225, down 27 points. The midcap index ended at 6292, lower by seven points and the smallcap index ended at 7585, down 66 points.

The intra-day pullback, albeit unsustained in the final analysis, may be attributed to the heartening decline in food inflation, which eased in end-January due to the moderating prices of fruits and vegetables. The food price index rose 13.07% and the fuel price index climbed 11.61% in the year to January 29. In the prior week, the annual food and fuel inflation had stood at 17.05% and 11.61% respectively. The primary articles price index was up 16.24% in the latest week, compared with an annual rise of 18.44% a week earlier. But the annual headline inflation in January is still expected to remain high. Headline inflation was 8.43% in December as the food inflation had reached a one-year high then.

There was nothing to cheer on the global market front, though. Indices across Asia, including the Hang Seng, Taiwan, Seoul and Straits Times, slumped more than a percent, while the key benchmark indices in France, Germany and UK declined between 0.2% to 0.6% in mid-day trades, taking cues from Wall Street’s retreat in overnight trades; the Dow had gained six points, while the Nasdaq was down seven points at close. And trading in US index futures indicated that the Dow could fall around 50 points at opening bell on Thursday.

Reliance Infrastructure soared 9.4% at Rs 585 to top the gainers list on the BSE after the company announced a board meeting on February 14 to mull buyback of its equity shares. The stock was hammered nearly 20% in the previous session on rumours that the CBI could question or even arrest senior officials of the group in connection with the 2G scam. The denial by the Anil Ambani Group, post the market closing on Wednesday, about group companies Reliance Infra and RNRL having received any notice from auditing regulator ICAI with regard to the consent settlement reached by the two companies with Sebi, would have also aided the recovery. RCom, which was also battered to a record low of Rs 90.80 on Wednesday, advanced by 1.7% to Rs 96. Among the other major gainers, Jaiprakash Associates jumped by 5.2% at Rs 76 and Tata Motors added 2.3% at Rs 1102.

On the other hand, SBI weakened by 3.6% at Rs 2496 to emerge as the top loser on the BSE. Bharti Airtel shed 2.7% at Rs 323 and Sterlite lost 2.5% at Rs 156. Index heavyweight RIL recovered after hitting 52-week low of Rs 885, but still ended down 1.3% at Rs 899. And the realty stocks had another terrible session as the sword of Damocles hung over their head post the arrest of the managing director of DB Realty, Balwa, by the CBI. DB Realty recovered from the day’s lows, but still ended down 1.9% at Rs 126. Unitech tumbled 5% at Rs 35 after being named by the CBI as one the beneficiaries of cheap spectrum allocation in 2008. Parsvnath Developers tumbled by 15.4% at Rs 27 and Orbit Corporation lost 4% at Rs 48. However, DLF ended higher by 1.4% at Rs 245 and Indiabulls Estate gained 4% at Rs 110.

Meanwhile, the BSE small and mid-cap indices touched fifteen month lows. Both these indices have underperformed their larger counterparts in the past one-and-half months, declining 22% and 20% respectively as against the Sensex’s decline of 14%. As many as 204 stocks from the mid and small-cap indices are trading at 52-week lows, including the likes of Aurobindo Pharma, Apollo Tyres, Punj Lloyd, Hindustan Construction Company, Aptech, Mastek, Indian Hotels and Escorts. Out of 847 stocks constituting the mid and small-cap indices, more than half or 444 stocks have underperformed the indices by falling over 20% each in the past one and half months. IVRCL Infrastructure, Allied Digital, Spectacle Infotek, SVC Resources and Jupiter Bioscience have more than halved from their December 31, 2010 levels. And on the sectoral front, the realty, capital goods and power indices are trading at 52-week lows on the BSE.

The market breadth was negative; Out of 2968 stocks traded on the BSE, there were 1059 advancing stocks as against 1751 declines.

source: Business Standard

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