Sensex sheds 75 points, ends at 17,540

Indian markets declined, despite positive trends in global bourses

The Sensex ended the day at 17,540, declining 75 points from the previous day’s close, while the Nifty closed at 5,245, down 18 points, despite positive global cues.

We had said that the market would end the day at a low and it did so. Currently, there is simply no momentum in the trend. Buyers have turned more cautious. Next week if the Nifty takes support at 5,200, the uptrend may continue or else it will go down a little bit and then bounce back with vigour.

During the day, NTPC rose 1% after the power ministry reportedly asked the petroleum ministry to place a proposal before the empowered group of ministers to allot 12 million standard cubic metres per day (mscmd) of gas from the KG-D6 block to State-run NTPC at $2.34 per million metric British thermal units (mmBtu).

Eicher Motors rose 1%, after the company’s total sales spurted 202.81% to 2,265 units in December 2009 over December 2008.

Transgene Biotek was up 3% after the company signed a pact with Dr Reddy’s Laboratories to manufacture a drug named Orlistat which is used for treating obesity.

AXIS IT&T shot up 10% on reports that the company would consider and approve the rights issue of equity shares on 12 January 2010.

As per reports, prime minister Manmohan Singh said that the economy is expected to grow at 7% this year and may soon return to a sustained high growth path of 9%-10%. Mr Singh pledged that his administration would work to address key constraints in the infrastructure and the agriculture sectors as these were priorities for the government. During trading hours, finance minister Pranab Mukherjee said that the economy could grow at 7.75% in the current fiscal year to end-March.

According to data released by the government, the food price index rose 18.22% in the 12 months to 26 December 2009, lower than an annual rise of 19.83% in the previous week.

According to reports, the government may introduce legislation in the budget session of Parliament to make necessary Constitutional amendments and facilitate the launch of the Goods & Services Tax (GST) although the rollout of this comprehensive indirect tax reform from the scheduled date of 1 April 2010 seems unlikely.

Meanwhile, the government will reportedly allow companies to adjust the fringe benefit tax (FBT) paid by them against the advance tax due in the March 2010 quarter, reducing the hazard of claiming a refund and slightly improving profits at a time of rising costs.

HSBC’s Emerging Markets Index climbed to 56.1 in the December-ended quarter from 55.3 in the third quarter, with measures for manufacturing and services output in the period expanding at their fastest pace in eight quarters.

HSBC said that the pace of the recovery appeared to be easing, as the gain in the index was “considerably weaker” than the 4.6-point advance registered in the third quarter. The index is calculated on 19 manufacturing- and service-sector purchasing manager indexes across 14 countries.

During the day, Asia’s key benchmark indices in China, Japan, South Korea, Hong Kong, Singapore, Indonesia and Taiwan rose by between 0.10%-1.09%.

South Korea’s central bank kept its interest rate unchanged at a record low of 2% for 11 months in a row amid a growing conflict with a government opposed to early monetary tightening.

On Thursday, 7 January 2009, the Dow Jones Industrial Average rose 33.18 points while the S&P 500 was up 4.55 points. However, the Nasdaq Composite was down 1.04 points.

As per US media reports, the labour department reported jobless claims last week had risen by just 1,000 to 434,000, which is less than expected. Continuing claims came in at 4.80 million, lesser than expectations of 4.98 million.

In premarket trading, the Dow was trading six points higher.

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