Sensex, Nifty in a highly risky zone: Friday Closing Report

Nifty may find minor support at 4,800. If it breaches this level it may slide to 4,700 and thereafter to 4,500

The market settled in the negative for the third day on dismal economic indicators and global concerns. On a below 10 day moving average of volume of 54.64 crore shares on the National Stock Exchange (NSE), the Nifty made a seven day (including today) closing low of 4,842. Presently the market is in a precarious situation. It may find minor support at 4,800; if it breaches this level, the benchmark may easily slip to level of 4,700 and thereafter to 4,500.

The market opened flat on concerns about the slowing growth, which was evident from the economic data released on Thursday. Globally, markets in the US closed lower on a rise in jobless claims rose for the seventh week and marginal increase in private jobs. The Asian pack was down in morning trade on dismal Chinese factory output data for May and continuing Eurozone problems.

Back home, the Nifty opened 13 points down at 4,911 and the Sensex resumed trade at 16,218, one point down from its previous close. Select buying soon saw the indices rise to their intraday highs. At this point, the Nifty inched up to 4,925 and the Sensex 16,226.

However, the market pared a portion of the gains and was range-bound in subsequent trade. The indices witnessed a sharp slide in late-morning trade as institutional selling continued unabated.

Meanwhile, the HSBC India Manufacturing Purchasing Managers' Index (PMI)-a measure of factory production-slipped slightly to 54.8 in May, from 54.9 in April, due to slowing domestic order book.

The benchmarks continued to trade lower in the post-noon session as the main European gauges were lower after a mixed opening on disappointing economic indicators. Once again, the market sank to the day's lows towards the end of trade with the Nifty falling to 4,832 and the Sensex dropping to 15,933.

With no support coming, the market closed near the lows of the day. The Nifty finished 83 points (1.68%) down at 4,842 and the Sensex tumbled 253 points (1.56%) to send the session at 15,965.

The advance-decline ratio on the NSE was in favour of the losers at 376:1037.

Among the broader markets, the BSE Mid-cap index declined 1.46% and the BSE Small-cap index dropped 1.22%.

The BSE Fast Moving Consumer Goods index (up 0.37%) was the lone gainer in the sectoral space today. The losers were led by BSE Capital Goods (down 2.99%); BSE Power (down 2.49%); BSE Auto (down 2.17%); BSE Oil & Gas (down 2.11%) and BSE IT (down 2.01%).

The top performers on the Sensex were GAIL India (up 2.65%); ITC (up 1.54%) and Sun Pharma (up 0.24%). The top losers were Tata Motors (down 3.73%); Larsen & Toubro (down 3.22%); Reliance Industries (down 3.16%); Sterlite Industries (down 3.08%) and Maruti Suzuki (down 2.94%).

The top gainers on the Nifty were ITC (up 2.27%); GAIL (up 1.62%); Sun Pharma (up 0.36%) and Hindalco Industries (up 0.30%). The main losers were Asian Paints (down 6.13%); Cairn India (down 5.57%); Siemens (down 5.43%); Bank of Baroda and Ranbaxy (down 5.05% each).

Markets across Asia, with the exception of the Shanghai Composite, closed weak on lower factory output data from China and the situation in Europe. However, Chinese stocks rose on speculations that the slowdown might prompt the country's policymakers to announce growth-boosting initiatives.

The Hang Seng fell by 0.38%; the Jakarta Composite declined 0.86%; the KLSE Composite dropped 0.45%; the Nikkei 225 tanked 1.20%; the Straits Times fell 0.97%; the KOSPI Composite lost 0.49% and the Taiwan Weighted tumbled 2.68%. Bucking the trend, the Shanghai Composite gained 0.05%.

At the time of writing, the key European indices were down between 0.84% to 1.57% and the US stock futures were sharply lower.

Back home, institutional investors-both foreign and domestic-were net sellers in the equities segment on Thursday. While foreign investors withdrew Rs665.76 crore, domestic institutional investors pulled out Rs266.30 crore.

Shriram EPC's board has approved a fund raising plans up to Rs150 crore through issue of equity shares in the form of QIPs/ADRs/GDRs/FCCBs/ and/or any other securities convertible into equity shares and/or rights issue or any combination thereof. The stock gained 0.79% to settle at Rs57.60 on the NSE.

Hinduja Foundries, at its board meeting, has approved the withdrawal of the proposed rights issue due to the volatile market conditions. The proposed issue was 1.66 crore equity shares of Rs10 each (for cash at Rs75 a share, including the premium of Rs65), aggregating Rs124.98 crore on rights basis in the ratio of 29:50. The stock surged 2.29% to close at Rs53.50 on the NSE.

Magma Fincorp has forayed into the gold loan business with the launch of Magma Gold Loan. The company's board of directors, in their meeting held on 15 December 2011 had passed an enabling resolution to enter into gold loan business. Further, the company is planning to start its retail housing finance business during the next fiscal. The stock gained 1.55% to close at Rs59.05 on the NSE.


Global markets in a crash mode

The US job creation data, having come far weaker than expected, energy, metals and stocks are on a massive selloff mode

Dow futures are down by 200 points in premarket trade as global markets have entered a crash mode. The markets have been gripped by the fear of severe slowdown ahead. This is reflected in the commodity markets as well. Crude oil has crashed by 6% today which follows a huge down move in late April and early May. Natural gas has crashed by about 7%. Copper, Nickel, Lead and Zinc are all down by about 3%.

The global markets have been weak for the last couple of months now, but the crash today has come about because of extremely poor jobs data released today. According to the government data, the economy created far fewer jobs than expected.During May, payrolls expanded by only 69,000 as against projected growth of 150,000. Even April’s employment gain was revised sharply down to just 77,000.

Treasuries rose which drove yields to below 1.50% for the first time, as more investors move away from stocks and switch to bonds. This made investors to tap the classic safe-haven as gold prices jumped $30 to about $1,580, following the yellow metals recent slump.
While Asian markets were influenced by lesser-than-expected growth in the China's manufacturing, troubles in Spain and Ireland affected the sentiment in Europe.
Spain Cajas are in big trouble and the Spanish Central Bank had agreed on bailing out troubled Spanish banks, prompting fears that Greece is only the tip of the iceberg.
European market were mostly lower on lingering fears over the economies of Greece and Spain. Key benchmark indices in France, Germany and London were down by 0.7%-2.1%.
Most Asia markets ended lower after data indicated that momentum is slowing in the Chinese economy. Key benchmark indices in Hong Kong, Singapore, Taiwan, Japan and South Korea were down by 0.4% to 2.7% while China's Shanghai Composite was flat.
The HSBC China manufacturing Purchasing Managers' Index (PMI) retreated to 48.4 from 49.3 in April - its seventh straight month. India's manufacturing sector kept up its steady expansion in May with the HSBC manufacturing PMI, slipped marginally to 54.8 in May from 54.9 in April. 


NSE revises liquidity enhancement scheme for FTSE 100 index

As per the revision in the existing order lever obligations in futures segment, presence on both buy and sell of the near month contract has been revised to at least 50% of the trading time

Mumbai: The National Stock Exchange (NSE) has revised liquidity enhancement scheme for derivatives of the FTSE 100 index effective from 18th June, reports PTI.

As per the revision in the existing order lever obligations in futures segment, the NSE said, presence on both buy and sell of the near month contract has been revised to at least 50% of the trading time during the two separate time periods 9.15am to 12.30pm and post 12.30pm till end of the market hours within the top 20 price points.

The maximum permissible bid-ask spread, for a minimum quantity of five contracts each at buy and sell, has been reduced to 3 ticks from 4 ticks, NSE said in a release here.

In the options segment, presence on both sides buy and sell of the near month contract has been revised to at least 50% of the trading time during two separate time periods 9.15am to 12.30pm and post 12.30 pm till end of the market hours, within the top 20 price points, it added.


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