Sensex ends 0.61% lower on weak Asian cues Analysis for Dec 27, 2011

Today, the domestic benchmarks closed on a negative note for the second straight session amid weak cues from the Asian markets. The Realty and Metal space led the decline.

BSE SENSEX closed at 15873.95 down by 96.8 points or by 0.61 % and then NSE Nifty ended at 4750.5 down by 28.5 points or by 0.6 %.The BSE MIDCAP closed at 5192.36 down by 35.87 points or by 0.69 %, while the BSE SMLCAP ended at 5650.02 down by 19.96 points or by 0.35 %.The BSE Sensex touched intraday high of 16049.12 and intraday low of 15799.63 The NSE Nifty touched intraday high of 4800.5 and intraday low of 4723.65.

Soon after witnessing a gap down opening, the domestic benchmarks slipped further amid weak cues from the Asian markets. Asian markets were mostly lower on Tuesday after the Bank of Japan warned of downside risks to the nation"s economy amid a stronger yen and Europe"s debt crises. Sentiment weakened further after a report said that consumer confidence in South Korea fell to the lowest level in three months in December 2011. Moreover, many investors were wary of making investments with the year soon approaching to an end. Lack of cues from the US markets on Monday, which was closed on account of a holiday, also weighed on domestic sentiment during morning trade. However, the benchmarks rebounded into positive terrain and surged to the day"s high. The benchmarks slipped back into negative terrain and extended their losses in afternoon trade before slumping to the day"s low amid profit –booking by investors. The benchmarks pared off some of its losses towards the end of the session amid a positive opening in the European markets. Finally, the benchmarks ended on a negative note, with the BSE Sensex and NSE Nifty shedding over 0.5% each. Among the BSE Sectoral indices, BSE Realty and BSE Metal ended lower by 1.72% and 1.38% respectively.

Among the Sensex stocks, DLF, Cipla, Coal India, Tata Steel and Tata Motors closed lower by 2.7%, 2.68%, 2.44%, 2.42% and 2.36% respectively. Among the 30 Sensex stocks, there were 8 advances and 22 declines. On BSE out of total shares traded 2868, shares advanced were 1205 while 1527 shares declined and 136 were unchanged.

On the economic front, Finance Minister Pranab Mukherjee said on Tuesday that the present slowdown in the domestic economy was temporary and it will soon bounce back into higher growth trajectory.

On the global front, consumer confidence in Asia"s fourth largest economy, South Korea, fell to the lowest level in three months in December 2011 as the lingering debt crises in Europe and an uncertain political outlook in neighboring North Korea after the death of top leader Kim Jong –II weighed on sentiment, said a report by the Bank of Korea on Tuesday.

On the Asian front, Shanghai Composite closed down by 1.09%, Hang Seng ended up 1.37% and Nikkei 225 closed down 0.46% on Tuesday.

On the European front, CAC40 was up 0.63%, DAX was trading higher by 0.44% and FTSE100 was up by 1.02% on Tuesday.

On the Corporate front, gas output from Reliance Industries Limited"s (RIL) KG-D6 gas field fell to a new low of 38.66 million cubic meters per day as 5 plants had to be shut due to maintenance purposes. The stock of the firm closed lower by 1.01% at Rs 753.25 on the BSE.

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