As suggested yesterday, the intraday rallies today were met with selling. Only a close above any previous day’s high would mean a trend reversal
 

Warning of a downgrade of India’s sovereign rating in the next years by S&P and European concerns led the market lower today. Today the Nifty moved in a narrow range of 5,647 and 5,687 and closed near the days low. Yesterday we had mentioned that the index will move with a negative bias, we continue with this stance. The National Stock Exchange (NSE) saw a volume of 69.04 crore shares and an advance decline ratio of 477:1291.

The market opened lower on weak global cues following the International Monetary Fund’s caution about the pace of global economic growth. Concerns about Spain and Greece also weighed on the sentiments.

The Nifty opened 34 points lower at 5,671 and the Sensex started the day at 18,699, down 94 points from its previous close. Select buying amid sharp volatility saw the indices hitting their intraday highs in early trade itself. At this point the Nifty rose to 5,687 and the Sensex went up to 18,741.

The market remain subdued in morning trade after global rating agency Standard & Poor’s stated that there is “one in three” chance of India facing a downgrade in its sovereign rating to junk status in the next two years. The agency added that the outlook can be revised upwards to stable if the government succeeds in reducing fiscal deficit, improve the investment climate and revives growth.

The announcement resulted in banking, capital goods and technology stocks coming under selling pressure. Selling intensified in the second half of trade as the European markets opened in the negative following comments from the IMF that the region’s debt crisis was seen as the main reason for the slowdown in global growth.

Lacklustre trade continued in the last hour, which dragged the benchmarks to their lows around 2.30pm. The Nifty went down to 5,648 and the Sensex retracted to 18,622 at the lows.

The market closed near the lows following the downgrade threat by S&P which resulted in the realty, power and banking sectors emerging as the top losers. The Nifty closed 49 points (0.85%) down at 5,656 and the Sensex dropped 162 points (0.86%) to settle at 18,631.

The broader markets suffered a bigger blow today as the BSE Mid-cap index dropped 1.29% and the BSE Small-cap tanked 1.53%.

BSE Fast Moving Consumer Goods (up 0.04%) was the only sectoral gauge to settle higher. The top losers were BSE Realty (down 4.61%); BSE Power (down 2.17%); BSE Bankex (down 1.31%); BSE PSU (down 1.31%) and BSE Capital Goods (down 1.30%).

Only three of the 30 stocks on the Sensex closed in the positive. The gainers were ITC (up 0.36%); Hero MotoCorp (up 0.33%) and Reliance Industries (up 0.09%). The key losers were State Bank of India (down 2.32%); Tata Power (down 2.25%); Hindalco Industries (down 2.11%); BHEL (down 2.04%) and NTPC (down 1.82%).

The top two A Group gainers on the BSE were—Container Corporation of India (up 3.29%) and Jaiprakash Associates (up 2.58%).
 

The top two A Group losers on the BSE were—GMR Infrastructure (down 9%) and Lanco Infratech (down 8.54%).

The top two B Group gainers on the BSE were—Karuturi Global (up 19.39%) and Burnpur Cement (up 17.35%).
 

The top two B Group losers on the BSE were—Som Distilleries & Breweries (down 12.26%) and Raj Oil Mills (down 12.02%).

Out of the 50 stocks listed on the Nifty, seven stocks settled in the positive. The key gainers were Jaiprakash Associates (up 2.87%); HCL Technologies (up 1.11%); Punjab National Bank (up 0.86%); Hero MotoCorp (up 0.64%) and ITC (up 0.48%). The major losers were DLF (down 5.40%); Siemens (down 3.98%); IDFC (down 3.43%); Reliance Infrastructure (down 2.94%) and SBI (down 2.70%).

Markets in Asia settled lower on worries that the tardy global growth would impact corporate earnings. The ongoing territorial dispute between China and Japan also weighed on investors.

The Hang Seng dipped 0.08%; the Jakarta Composite shed 01.01%; the KLSE Composite fell 0.24%; the Nikkei 225 tanked 1.98%; the Straits Times declined 1.05% and the Seoul Composite dropped 1.56%. Bucking the trend, the Shanghai Composite gained 0.22%. The Taiwan market was closed for trade today.

At the time of writing, markets in Europe were down between 0.22% and 0.41% and the US stock futures were in the negative.

Back home, foreign institutional investors were net buyers of shares totalling Rs613.98 crore on Tuesday whereas domestic institutional investors were net sellers of stocks amounting to Rs430.60 crore.

Reliance Power has raised external commercial borrowings of around Rs1,588 crore ($302 million) to fund its 100 MW solar power project in Rajasthan. The 100MW plant is being built adjacent to India’s largest thin film PV Project, the 40 MW photovoltaic project, commissioned by the company in March. The stock tanked 4.05% to settle at Rs99.60 on the NSE.

L&T Finance Holdings, the NBFC arm of the engineering giant Larsen & Toubro, today said it has successfully completed the acquisition of Indo Pacific Housing Finance (IPHF) for Rs110 crore. The acquisition is likely to help L&T Finance enter the housing finance business by expanding the network of IPHF. The stock closed 1.44% lower at Rs51.50 on the NSE.

Off-the-road tyre manufacturer Balkrishna Industries has commissioned the first phase of its plant at Bhuj in Gujarat. The greenfield plant is a part of the company’s Rs1,800-crore expansion programme that would be completed in 2015. The stock dropped 1.55% to close at Rs285 on the NSE.