More than a day’s correction may be needed to get back to a positive trend
 

The market, which was in the positive till noon trade, was hurtled into the red following remarks by S&P that India would be the first among BRIC nations to lose its investment grade rating. We had mentioned in our Friday’s closing report that Nifty may find its first resistance at 5,100, after which there may be a minor correction. Today the index crossed this level after which it slipped into the red during the last hour of trade. We may see the correction extending tomorrow, as well. However, if the negative move continues for more than a day, the downward trend may set in. Today the National Stock Exchange (NSE) saw a higher volume of 71.82 crore shares.

The market opened in the positive on news that the European Union, on Saturday, agreed to led up to 100 billion euros to Spain to help its beleaguered banks. The news also boosted the Asian markets in morning trade. The Nifty opened 29 points higher at 5,097 and the Sensex resumed trade at 16,805, up 86 points over its previous close.

The early gains were supported by banking, metal, power, auto and capital goods sectors which witnessed good buying interest. The upmove enabled the benchmarks hit their intraday highs in the first half hour itself with the Nifty going up to 5,124 and the Sensex rising to 16,894.

Meanwhile, the rupee rose by 32 paise to trade at 55.10 against the dollar in early trade as the greenback weakened against euro overseas.  The Indian unit had lost 48 paise to close at 55.42 against the dollar in the last session.

The market remained range-bound till the noon session after which strong selling pressure was the benchmarks pare all their gains and venture into the negative territory. The decline followed a warning from ratings agency Standard & Poor’s (S&P) that India might be the first among BRIC nations (Brazil, Russia, India and China) to lose its investment grade rating.

The news also saw the benchmarks fall to their day’s lows towards the end of trade. At this point, the Nifty dropped to 5,041 and the Sensex went back to 16,627.

The market ended the trading session marginally off the lows, snapping its five-day winning streak. At the close, the Nifty settled 14 points down at 5,054 and the Sensex lost 51 points to finish at 16,668.

The advance-decline ratio on the NSE was 802:739.

The broader markets closed on a mixed note. The BSE Mid-cap index dipped 0.20% while the BSE Small-cap index rose 0.21%.

BSE Consumer Durables (up 0.99%) and BSE Fast Moving Consumer Goods (up 0.19%) settled higher while all other sectoral indices ended in the red. They were led by BSE Capital Goods (down 1.64%); BSE Healthcare (down 1.34%); BSE Realty (down 1.02%); BSE Oil & Gas (down 0.75%) and BSE Auto (down 0.56%).

Tata Power (up 2.18%); Bajaj Auto (up 1.85%); Hindustan Unilever (up 1.58%); GAIL India (up 1.55%) and Coal India (up 1.44%) were the top gainers on the Sensex. The main losers were Cipla (down 2.25%); BHEL (down 2.21%); Larsen & Toubro (down 1.99%); Jindal Steel (down 1.93%) and Tata Motors (down 1.40%).

Tata Power (up 2.23%); Bajaj Auto (up 2.07%); Grasim Industries (up 1.55%); HUL (up 1.40%) and Siemens up 1.32%) were the key gainers on the Nifty. The main laggards were HCL Technologies (down 3.46%); BHEL (down 2.83%); Cipla (down 2.62%); Sesa Goa (down 2.52%) and L&T (down 2.40%).

Markets in Asia settled in the green on easing of banking concerns in Spain after EU leaders agreed to lend 100 billion euro to help Spanish banks deal with their liquidity issues. Positive economic data from China also supported the gains.

The Shanghai Composite climbed 1.07%; the Hang Seng surged 2.44%; the Jakarta Composite advanced 1.07%; the KLSE Composite rose 0.50%: the Nikkei 225 gained 1.96%; The Straits Times jumped 1.82%; the KOSPI Composite surged 1.71% and the Taiwan Weighted settled 1.72% higher.

At the time of writing, the key European indices were trading with gains of 0.97% to 1.95% and the US stock futures were in the positive.

Back home, foreign institutional investors were net buyers of shares totalling Rs202.01 crore on Friday while domestic institutional investors were net sellers of equities amounting to Rs81.48 crore.

Hinduja Group flagship firm Ashok Leyland today said it has supplied 100 ‘Falcon’ buses to Ghana for $7.6 million (about Rs42 crore). The vehicles have been inducted to the fleet of a transport company—Metro Mass Transit—in which the Government of Ghana has 45% stake. The buses will ply on 360 routes throughout Ghana, both inter and intra-city. The stock closed at Rs26.70 on the NSE, up 0.38% over its previous close.

Metkore Alloys & Industries is set to build a world-class 1,65,000 tonnes per annum capacity ferro chrome smelter project in Oman with an envisaged investment of $80 million. The company is negotiating with a local firm for a joint venture agreement, but no agreement has been signed so far. The stock surged 2.86% to close at Rs14.40 on the NSE.

The Dhampur Sugar Mills today said its board has approved the merger of JK Sugar with the company and shareholders of the latter will get 275 shares for every 1,000 shares they hold. The proposed merger is subject to regulatory and other approvals, the company added. Dhampur Sugar settled 1.35% higher at Rs45.20 on the NSE.