The downward momentum has probably been contained. Watch for a close above 5,450 and 5,350 on the Nifty for short-term direction

The market opened on a positive note but lost its momentum as lower growth for the third quarter resulted in a sell-off in the second half of trade. We mentioned in out market closing report yesterday that Tuesday’s gains were not a sign of a reversal. For a reversal, the Nifty has to end well above the day’s close. The National Stock Exchange (NSE) saw a volume of 97.23 crore shares.

The market witnessed a firm opening on global cues and news that the government would divest 5% stake in state-owned explorer ONGC on Thursday. On the international front, the European Central Bank (ECB) is likely to offer cheap funds to banks in the continent, which are facing liquidity issues. Back home, the Nifty opened at 5,425, up 49 points over its previous close, and the Sensex surged 189 to resume trade at 17,920.

Across-the-board buying by institutional investors helped the market extend its gains and hit the day’s highs in early trade. At the highs, the Nifty touched 5,459 and the Sensex rose to 18,001. However, the indices were under pressure in subsequent trade ahead of the release of the gross domestic product (GDP) numbers for the December quarter.

GDP for the December 2011 quarter coming in at an over two-year low of 6.1% resulted in the benchmarks paring their gains. The market dipped into the red in post-noon trade as selling became intense. The market fell to the day’s lows a little after 1.30pm with the Nifty going down to 5,352 and the Sensex at 17,678.
 
The market recovered from the lows but was treading water in the last hour in the absence of any triggers. The market closed flat with a positive bias and in the green for the second day. The Nifty added 10 points to settle at 5,385 and the Sensex rose 22 points to finish the session at 17,753.

The advance-decline ratio on the NSE was 968:729.

Among the broader indices, the BSE Mid-cap index advanced 1.10% and the BSE Small-cap index gained 0.62%.

BSE Realty (up 5.91%); BSE Capital Goods (up 4.02%); BSE Bankex (up 3.93%); BSE Power (up 3.57%) and BSE Metal (up 3.43%) were the top sectoral gainers while BSE IT (down 0.56%) and BSE Fast Moving Consumer Goods (down 0.13%) were the losers.

Boosted by the ONGC stake sale news, the BSE Oil & Gas index (up 2.53%) was the top sectoral gainer today. Other gainers were BSE PSU (up 1.51%); BSE Metal (up 1.45%); BSE Realty (up 1.10%) and BSE Consumer Durables (up 0.66%). The losers were BSE Capital Goods (down1.59%); BSE Fast Moving Consumer Goods (down 0.72%) and BSE Bankex (down 0.59%).

ONGC (up 3.46%); Sterlite Industries (up 2.98%); Tata Steel (up 2.90%; Reliance Industries (up 2.84%) and Wipro (up 2.72%) were the best performing stocks on the Sensex. The laggards were led by Larsen & Toubro (down 2.91%); HDFC Bank (up 2.34%); Jindal Steel (down 1.81%); ITC (down 1.35%) and Hero MotoCorp (down 1.07%).

The Nifty toppers were SAIL (up 3.76%); ONGC (up 3.46%); Wipro (up 3.18%); Sesa Goa (up 3.12%) and Tata Power (up 2.99%). The key losers were L&T (down 3.28%); HDFC Bank (down 2.81%); Siemens (down 2.28%); Jindal Steel (down 1.62%) and Reliance Infrastructure (down 1.50%).

Markets in Asia, with the exception of the Chinese benchmark, settled in the positive on hopes that the new fund infusion by the ECB would help ease the liquidity crunch faced by European banks. The Shanghai Composite closed lower after the government reiterated its plan to keep a tab on realty prices.

The Hang Seng gained 0.52%; the Jakarta Composite jumped 2.09%; the KLSE Composite rose 0.83%; the Nikkei 225 added 0.01%, the Straits Times climbed 0.82%; the Seoul Composite advanced 1.33% and the Taiwan Weighted surged 2.04%. On the other hand, the Shanghai Composite declined 0.95%. At the time of writing, two of the three key European indices were in the green while the US stock futures were in the positive.

Back home, foreign institutional investors were net buyers of shares totalling Rs727.59 crore while domestic institutional investors were net sellers of stocks aggregating Rs587.21 crore on Tuesday.

AstraZeneca Pharma India today said it is undertaking voluntary recall of sterile products manufactured at its Bangalore facility. “This recall is a purely voluntary action on the part of the company taken as a measure of extra and abundant caution although there is no patient safety issue related to sterility,” the company said in a filing to the exchanges. The stock jumped 7.26% to close at Rs1,921 on the NSE today.

Sun Pharmaceutical Industries today said it has received approval from the US health regulator for its generic Zyprexa Zydis tablets, used in treating mental disorder, in the American market. The US Food and Drug Administration (USFDA) has granted approval for its abbreviated new drug application (ANDA) for generic version of Zyprexa Zydis, Olanzapine ODT, in strengths of 5 mg, 10 mg, 15 mg and 20 mg, Sun Pharma said in a statement. The stock rose 0.85% to close at Rs551 on the NSE.

Cement major ACC will set up a new clinker production facility of 2.79 million tonnes per annum and allied grinding facility at Jamul in Durg district of Chhattisgarh, phasing out the existing clinkering and grinding lines there. The new plant will help meet the demand for cement in the eastern region. The stock gained 1.42% to close at Rs1,307 on the NSE.