Post Session-Sensex ends 0.22% lower on weak global cues Analysis for Jan 09, 2012

The domestic benchmarks ended on a bearish note as weak global cues weighed on sentiment. The Oil & Gas and Auto space led the decline.

BSE SENSEX closed at 15814.72 down by 34.08 points or by 0.22 % and then NSE Nifty ended at 4742.8 down by 4.1 points or by 0.09 %.The BSE MIDCAP closed at 5331.41 up by 33.79 points or by 0.64 %, while the BSE SMLCAP ended at 5842.53 up by 80.92 points or by 1.4 %.The BSE Sensex touched intraday high of 15871.51 and intraday low of 15678.3 The NSE Nifty touched intraday high of 4758.7 and intraday low of 4695.45.

The negative closing of the US markets on Friday impacted domestic sentiment during morning trade. On Friday, the Dow Jones Industrial Average index closed down by 0.45% or 55.78 points at 12,359.92, the S&P 500 ended down 0.25% or 3.25 points at 1,277.81 and the Nasdaq ended up by 0.16% or 4.36 points at 2,674.22. Soon after witnessing a gap down opening, the domestic benchmarks slipped further and slumped to the day's low amid weak cues from the Asian markets. Most of the Asian stock markets were trading lower on Monday amid renewed concerns over the lingering debt crises in Europe. German chancellor Angela Merkel and French President Nicholas Sarkozy were scheduled to meet on Monday to discuss the region's debt crises and finalize the details of a fiscal compact agreed to in December 2011 that lays down stricter budget rules for Eurozone governments'. However, market expectations for the outcome of the meeting were low, with investors eyeing the Italian and Spanish bond auctions later in the week. Sentiment weakened after a report said that the IMF expressed its doubt over the ability of the Greek government to fix its economy and reduce its debts, putting to rest hopes that the Eurozone debt crises may abate soon. However, Chinese stocks rose amid hopes that the central bank may loosen its monetary policy in the near-term to boost growth. Back, home, worries over slowing growth also led to selling pressure. The Indian government cut the nation's economic growth estimate for 2011-12 to 7 per cent from 7.5 per cent forecasted earlier. Moreover, investors were also cautious ahead of the corporate earnings season beginning this week. The benchmarks recovered from the day's low and pared off its losses during afternoon trade but continued to trade in the negative terrain. The domestic benchmarks bounced back into the positive terrain for a brief period amid positive opening in the European stocks. However, the domestic benchmarks lost momentum and fell below the baseline amid subdued investor sentiment. The benchmarks continued to trade in the negative terrain in the final couple of hours of the session. Finally, the benchmarks closed on a weak note, with the BSE Sensex shedding 0.22%. Among the BSE Sectoral indices, BSE Oil & Gas and BSE Auto ended down by 0.71% and 0.47% respectively.

Among the 30 Sensex stocks, Bharti Airtel, SBI, Coal India, Tata Motors and Bajaj Auto closed lower by 2.93%, 1.92%, 1.59%, 1.52% and 1.49% respectively. On BSE out of total shares traded 2866, shares advanced were 1657 while 1104 shares declined and 105 were unchanged.

On the economic front, Finance Minister Pranab Mukherjee said on Monday that India has became the growth driver of the global economy and insisted that structural reforms were the key to sustain the high growth trajectory of the nation's economy.

On the global front, money supply and lending in Asia's largest economy, China, accelerated in December 2011 amid easing monetary policy conditions, said a report by the People's Bank of China on Sunday. New loans issued by Chinese financial institutions in December 2011 stood at 640.5 billion yuan, up from 562.2 billion yuan sanctioned in November 2011, the central bank said.

On the Asian front, Shanghai Composite closed up 2.89%, Hang Seng ended up 1.47% and Nikkei 225 ended down 1.16% on Monday.

On the European front, CAC40 was down 0.24%, DAX was down 0.34% and FTSE100 was trading lower by 0.07% on Monday.

On the Corporate front, Essar Oil announced on Monday that it has successfully commissioned the Amine Regeneration Unit (ARU), which is a part of the Phase I expansion at its Vadinar Refinery. The stock of Essar Oil closed up 1.22% at Rs 58.15 on the BSE on Monday.

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