Sensex may trade in a range for a few more days with reducing volatility
The market opened in negative territory on lower-than-expected quarterly earnings announced by IT bellwether Infosys Technologies. Some pull-back was noticed towards noon, but the announcement of the weekly food inflation data added to the woes, dragging the indices further southwards. Nervousness ahead of the wholesale price index-based inflation data, due to be announced tomorrow, kept the indices range-bound in the post-noon trade.
Another minor bout of selling in the last half-hour resulted in the market touching the day's low and closing marginally higher, albeit in the red.
On Wednesday we had said watch out whether the index trades on Thursday above the previous day's high, for indications of strength. The Sensex and Nifty traded below yesterday's high in the morning session and soon the bears took over. Eventually, the Sensex fell 351 points at 19,183 and the Nifty fell 111 points at 5,752 wiping off yesterday's gains completely.
The market continues to look weak and will trade in the range of 19,000 and 19,600 on the Sensex. Watch out tomorrow whether the market trades above today's high, for the first indication that the current bearish spell is about to end.
The market breadth was negative today. The Sensex had 25 losers, four gainers and one stock remained unchanged. On the Nifty, 41 stocks declined while nine were in the advancing list. Among the broader markets, the BSE Mid-cap index declined 0.80% and the BSE Mid-cap index fell 0.65%.
The BSE Realty index (up 0.54%) was the only sectoral gauge to end higher. BSE Bankex (down 3.53%), BSE IT (down 3.41%), BSE TECk (down 2.76%), BSE Consumer Durables (down 2.70%) and BSE Metal (down 1.23%) were the top sectoral losers.
Tata Motors (up 1.58%), ONGC (up 1.04%), DLF (up 0.61%) and Reliance Communications (up 0.14%) were the gainers on the Sensex. The laggards were Infosys Technologies (down 4.82%), State Bank of India (down 3.91%), ICICI Bank (down 3.88%), HDFC Bank (down 2.90%) and Wipro (down 2.67%) were the top losers.
Food inflation declined, but still remained at an elevated level of 16.91% for the week ended 1st January, prompting the government to assure more steps to rein in prices of essential items. Even as food inflation moderated from 18.32% from the previous week, overall inflation, as measured by the wholesale price index, is likely to go up in the range of 8.2%-8.5% in December, from 7.48% in the previous month, economists said.
Markets in Asia, baring the Seoul Composite, ended with gains on signs that authorities in Europe were making concerted efforts to contain the debt crisis. The gains were also supported by material stocks on higher commodity prices.
The Shanghai Composite gained 0.22%, the Hang Seng rose 0.47%, the Jakarta Composite advanced 0.29%, the KLSE Composite was up 0.32%, the Nikkei 225 surged 0.73%, the Straits Times rose 0.34% and the Taiwan Weighted added 0.12%. On the other hand, the Seoul Composite lost 0.26% in trade today.
Back home, foreign institutional investors were net sellers of stocks worth Rs371.50 crore on Wednesday. On the other hand, domestic investors were net buyers of equities worth Rs359.21 crore.
BlackBerry maker Research In Motion (RIM) today said it has provided a solution for legally intercepting messenger and internet services, but denied access on the BlackBerry Enterprise Server, saying the company has "no ability to provide its customers' encryption key." However, the enablement of lawful access does not extend to the BlackBerry Enterprise Server (BES), which is essentially a Virtual Private Network (VPN) solution.
After announcing their joint venture in late 2009, Indian Oil Corporation (down 2.76%) today formally entered into an agreement with the Nuclear Power Corporation to set up power plants across the country. The agreement marks the foray of the oil refining and marketing major into nuclear power generation. The state-run oil major has already forayed into renewable energy sources like solar, wind, bio-fuels and hydrogen.
J B Chemicals & Pharmaceuticals (down 2.75%) on Thursday said its profit after tax (PAT) rose by 28.95% to Rs38.12 crore for the third quarter ended 31st December compared to Rs29.56 crore in the previous corresponding period. The company's net sales stood at Rs216.67 crore for the third quarter, up from Rs198.07 crore in the year-ago period.
Elecon Engineering Company (up 0.63%) has been awarded an order worth Rs24.83 crore from S K Samanta & Company for design, engineering, manufacturing, supplying, erection, testing and commissioning of material handling equipments and other equipment.
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