The market settled lower amid volatile trade as a slew of economic indicators and possibility of a washout of the Monsoon Session of Parliament weakened investor sentiments. On Friday we had mentioned that a higher high and higher low on the Nifty will be the first sign of reversal. Since 24th August, when the fall began, the index has made a lower high and a lower low. However, today the benchmark managed to make a higher low and ended marginally in the negative. The Nifty needs to see a real big move for a proper direction to emerge. The National Stock Exchange (NSE) saw a volume of 46.82 crore shares and an advance decline ratio of 756:617.
The market witnessed a gap up opening on positive global cues and domestic triggers. On the global front, assertion by the US Federal Reserve on Friday that it would take necessary steps to boost the country’s economy lifted Asian markets in morning trade today. On the domestic front, the expert committee on General Anti Avoidance Rules (GAAR) on Saturday recommended postponement of the controversial tax provision by three years and abolition of capital gains tax on transfer of securities.
The Nifty opened 18 points higher at 5,277 and the Sensex resumed trade at 17,466, 36 points over its previous close. Capital goods, metal and power led the all-round buying in early trade, helping the benchmarks scale their intraday highs. At the highs, the Nifty rose to 5,296 and the Sensex climbed to 17,510.
The market was sideways till mid-morning trade as continuing disruption of Parliament proceedings, for the ninth day today, worried investors about the fate of reforms chalked out by the government to woo fresh investments.
Manufacturing output for the month of August, as measured by the HSBC factory Purchase Managers’ Index, which came in at a nine-month low of 52.8 from 52.9 in the previous month, resulted in the benchmarks paring their gains and slipping into the negative in late morning trade.
The market touched its low around 12.10pm with the Nifty falling to 5,243 and the Sensex moving back to 17,350. The positive opening of the key European indices enabled the domestic benchmarks recover from their lows and enter into the positive. However, the gains were short-lived as selling pressure pushed them into the red once more.
A fair degree of choppiness saw the indices hover on both sides of their previous close in post-noon trade. The market settled marginally in the negative on selling pressure in realty, oil & gas and metal sectors in late trade. The Nifty closed five points lower at 5,254 and the Sensex settled 45 points down at 17,384.
While the Sensex settled marginally lower, the broader indices ended in the positive. The BSE Mid-cap index added 0.09% and the BSE Small-cap index rose 0.03%.
The sectoral gainers were BSE Capital Goods (up 0.53%); BSE Consumer Durables (up 0.61%); BSE Auto (up 0.40%) and BSE Power (up 0.12%). The main losers were BSE Realty (down 0.86%); BSE Oil & Gas (down 0.80%); BSE Bankex (down 0.65%); BSE Metal (down 0.59%) and BSE Healthcare (down 0.34%).
Of the 30 shares in the Sensex list, 12 settled in the green. The top gainers were Bajaj Auto (up 3.04%); Coal India (up 2.18%); Cipla, Maruti Suzuki (up 1.79% each) and BHEL (up 0.98%). Jindal Steel (down 2.23%); Tata Power (down 1.91%); Tata Motors (down 1.24%); Tata Steel (down 1.23%) and ONGC (down 1.20%) settled at the bottom of the index.
The top two A Group gainers on the BSE were—Aurobindo Pharma (up 6.78%) and Exide Industries (up 5.34%).
The top two A Group losers on the BSE were—Piramal Healthcare (down 6.39%) and IFCI (down 4.79%).
The top two B Group gainers on the BSE were—Advance Metering Technology (up 16.32%) and Mahavir Impex (up 16.18%).
The top two B Group losers on the BSE were—Arunjyoti Enterprises (down 12.93%) and Sambandham Spinning Mills (down 12.58%).
Out of the 50 stocks listed on the Nifty, 16 settled in the positive. The index was led by Ranbaxy Laboratories (up 3.12%); Coal India (up 2.66%); Bajaj Auto (up 2.65%); Maruti Suzuki (up 2.32%) and Hero MotoCorp (up 2.21%). The major losers were SAIL (down 2.24%); Tata Power (down 2.21%); Jindal Steel (down 2.03%); IDFC (down 2.01%) and Ambuja Cement (down 2%).
The Asian pack settled mostly higher as economic data from across the region kindled fresh hopes of the central banks might takes steps to spur growth. Two separate readings of China’s manufacturing activity for August has pointed to a slowdown, a sign that the decline is likely to continue into the third quarter.
The Shanghai Composite gained 0.57%; the Hang Seng rose 0.39%; the Jakarta Composite surged 1.42%; the KLSE Composite climbed 0.47%; the Seoul Composite advanced 0.40% and the Taiwan Weighted settled 0.72% higher. On the other hand, the Nikkei 225 declined 0.63% and the Straits Times fell 0.27%.
At the time of writing, the key European markets were in the green and US stock futures were mixed. However, the US markets will remain closed on Monday for the Labor Day holiday.
Back home, institutional investors—both foreign and domestic—were net sellers of shares on Friday. While foreign institutional investors withdrew Rs211.08 crore from stocks, domestic institutional investors pulled out Rs172.54 crore.
Pharma major Wockhardt today said it has received final approval from the US health regulator for marketing generic bupropion hydrochloride tablets used for treating depression and is launching the product immediately. Bupropion tablets are generic version of Glaxo Smithkline's Wellbutrin SR tablets. Wockhardt declined 1.03% to close at Rs1,217 on the NSE.
The Serious Fraud Investigation Office (SFIO) has received complaints about alleged violation of corporate governance and other norms by textile major S Kumars Nationwide and the matter is being examined by the Registrar of Companies, ministry of corporate affairs said today. The stock fell 1.28% to settle at Rs19.25 on the NSE.
Wind turbine maker Suzlon today said its overseas subsidiary REpower Systems has bagged a 131.2 MW contract from Meridian Energy of Australia to supply 64 turbines for its wind farm project. The project will have a total capital cost of around 260 million Australian dollars and is scheduled to be installed and commissioned between September 2013 and January 2015. Suzlon closed at Rs15.40 on the NSE, up 2.67% over its previous close.