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. 


Newsviewer Exclusive
Google new product search to be a paid service in US

Google's new product discovery experience will be called Google Shopping and its transition in the US would be on purely commercial model built on Product Listing Ads

New York: Google's free 'product search' would soon be a paid service in the US under which merchants and retailers will have to pay for listings of products, reports PTI.

"We are starting to transition Google Product Search in the US to a purely commercial model built on Product Listing Ads. This new product discovery experience will be called Google Shopping and the transition will be complete this fall," Google Shopping Vice President (Product Management) Sameer Samat said in his blog yesterday.

The new initiative seen as a step to boost company's revenue will in addition provide the customers a higher quality shopping experience.

"... Shoppers can easily research purchases, compare different products, their features and prices, and then connect directly with merchants to make their purchase," Samat said.

The service will be based on bid price and relevance giving the merchants and retailers a greater control over where their products appear on Google Shopping. Over a period of time they will also have the opportunity to market special offers.

The internet company has begun experimenting with some new commercial formats on Google.Com that will make it easier for users to find and compare different products.

These include larger product images that give shoppers a better sense of what is available and also the ability to refine a search by brand or product type.

These new formats would be labeled "sponsored," and take space currently occupied by AdWords. Users maybe able to view details regarding a product in one place and make a decision on the product and merchant of their choice.

"Google Shopping will empower businesses of all sizes to compete effectively, and it will help shoppers turn their intentions into actions lightning fast. The changes are a first step toward providing technology, tools and traffic to help power the retail ecosystem," Sampat said.


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