Watch for 5,460 on the Nifty

A decline in economic growth in the December quarter, which was at an over two-year low, saw the market snapping its two-day gain and closing lower today. A marginal decline in factory output numbers for February also weighed on the market. The downtrend on the Nifty may see a pause soon. The index is likely to see an upmove to the level of 5,460. The National Stock Exchange (NSE) saw a volume of 86.29 crore shares today.

The market opened lower tracking the weak Asian markets in morning trade, following US Federal Reserve chairman Ben Bernanke deferring an announcement of any new policy package that would steer growth. The Nifty opened 19 points down at 5,366 and the Sensex resumed trade at 17,715, a cut of 38 points over its previous close.

Although in the red, the indices touched their day’s highs in early trade with the Nifty at 5,372 and the Sensex at 17,718. However, all-round selling pressure led all the sectoral gauges lower. A marginal fall in manufacturing activity in February, as shown by the HSBC Factory PMI, also weighed on the investors.

A lower opening of the key European markets added to the woes in post-noon trade. Besides, the 5% stake sale in ONGC also saw investor interest shift towards the company. The benchmarks fell to their day’s lows a little after 2.00pm. At the lows, the Nifty went down to 5,298 and the Sensex dropped to 17,463.

Bargain hunting, after the indices hit the lows, helped the market pare some of the losses in late trade but the gain lacked strength to push the market into the positive. Finally, the Nifty closed 45 points lower at 5,340 and the Sensex declined 169 points to 17,584.

The advance-decline ratio on the NSE was 708:1039.

Among the broader indices, the BSE Mid-cap index declined 0.53% and the BSE Small-cap index fell 0.38%.

BSE Healthcare index (up 0.25%) was the lone gainer today. The top sectoral losers were BSE Realty (down 3.29%); BSE Capital Goods (down 1.62%); BSE Bankex (down 1.20%); BSE Oil & Gas (down 0.95%) and BSE Auto (down 0.90%).

The top Sensex gainers were Maruti Suzuki (up 4.64%); Hindalco Industries (up 1.35%); HDFC (up 0.98%); Tata Power (up 0.91%) and Coal India (up 0.09%). The losers were led by DLF (down 5.17%); Mahindra & Mahindra (down 3.67%); BHEL (down 2.97%); NTPC (down 2.54%) and ICICI Bank (down 2.44%).

The Nifty toppers were Maruti Suzuki (up 5.20%); Ambuja Cement (up 3.27%); Siemens (up 2.48%); Reliance Power (up 2.22%) and Cairn India (up 1.84%). The key losers were DLF (down 6.40%); M&M (down 3.94%); IDFC (down 3.75%); BHEL (down 3.06%) and Axis Bank (down 3.04%).

Markets in Asia settled mostly in the negative as the US Fed chairman on Wednesday refrained from announcing any fresh measures to boost the economy. A fall in bank lending in China in February resulted in the Chinese and Hong Kong markets settling down while profit booking saw the Nikkei 225 closing in the red.

The Shanghai Composite lost 0.10%; the Hang Seng tanked 1.35%; the Jakarta Composite slipped 0.58%; the Nikkei 225 fell by 0.16%; the Straits Times dropped 0.51% and the Taiwan Weighted lost 0.04%. Bucking the trend, the KLSE Composite gained 0.24% and the Seoul Composite surged 1.33%. At the time of writing, the key European indices recovered from their early losses and were marginally in the positive and the US stock futures were trading higher.

Back home, foreign institutional investors were net buyers of stocks totalling Rs579.63 crore on Wednesday. On the other hand, domestic institutional investors were net sellers of equities aggregating Rs431.07 crore.

Tata Communications (TCL) today said it is considering an acquisition bid for London-listed telecommunication giant Cable & Wireless Worldwide Plc (CWW). TCL said "considerations are at a very preliminary stage and there can be no certainty that an offer will be made”. The stock added 0.15% to close at Rs234 on the NSE.

In a move which should caution power developers to avoid illegal dumping of waste like excavated debris, the Department of Forests, Environment and Wildlife in Sikkim has fined NHPC Rs75 lakh for violation of forest laws and unauthorised dumping of muck at Elaichi Khola and the area downstream of Teesta Stage V in East district. The stock gained 1.89% to close at Rs21.60 on the NSE.

At a time when overall credit growth in the economy is slackening, Pune-based non-banking finance company Bajaj Finance (BFL), is focussing on retail lending opportunities in India. It expects to expand its loan book at 25-30% in FY11-12.The stock dipped 2.34% to close at Rs772 on the NSE.