Post Session- Sensex ends flat ahead of quarterly earnings Analysis for Jan 11, 2012

The domestic bourses ended on a flat note, with a positive bias in volatile trade as investors turned cautious ahead of the release of the quarterly earnings report card of companies this week. The Realty and the Metal space were among the major gainers.

BSE SENSEX closed at 16175.86 up by 10.77 points or by 0.07 % and then NSE Nifty ended at 4860.95 up by 11.4 points or by 0.24 %.The BSE MIDCAP closed at 5505.52 up by 54.44 points or by 1 %, while the BSE SMLCAP ended at 6075.43 up by 78.95 points or by 1.32 %.The BSE Sensex touched intraday high of 16244.7 and intraday low of 16127.77 The NSE Nifty touched intraday high of 4877.2 and intraday low of 4841.6.

The positive closing of the US markets on Tuesday did not have a major impact on domestic sentiment during morning trade. On Tuesday, the Dow Jones Industrial gained 69.78 points and closed at 12462.47. The S&P 500 gained 11.38 points and closed at 1292.08 and the Nasdaq closed at 2702.5, gaining 25.94 points over the previous day's closing. Soon after witnessing a flat opening, the benchmarks turned volatile ahead of the corporate earnings season beginning on Thursday, as investors bet that corporate margins may have remained under pressure in the December 2011 quarter amid a worsening global outlook and high borrowing costs. After trading choppy, the benchmarks surged above the baseline, touching the day's high during afternoon trade amid positive cues from the Asian markets. Asian markets traded higher on Wednesday as optimism that US economic recovery is gaining momentum outweighed concerns over the deepening debt crises in Europe. Markets also cheered the approval of 100 per cent FDI in single-brand retail. However, the benchmarks reversed their gains and fell deep into negative terrain amid weak opening in the European markets. Most of the European markets were trading lower on Wednesday ahead of the debt auctions of Italy and Spain on Thursday. Sentiment also weakened after a report said that the German economy contracted 0.25 per cent in fourth quarter, 2011, raising concerns that the economy is in the brink of a recession. The benchmarks recovered from the day's low in the final hour of the session to end on a marginally positive note. Among the sectoral indices, BSE Realty and BSE Metal ended up 4.64% and 2.26% respectively.

Among the 30 Sensex stocks, Hindalco Industries, Sterlite Industries, DLF, Tata Steel and Hero MotoCorp closed higher by 5.69%, 4.85%, and 3.41%, 2.88% and 1.97% respectively. Among the Sensex stocks, there were 16 advances and 14 declines. On BSE out of total shares traded 2986, shares advanced were 1904 while 968 shares declined and 114 were unchanged.

On the economic front, the Indian government on Tuesday approved 100 per cent Foreign Direct Investment (FDI) in single -brand retail. Reports also said that the government may give nod to allowing FDI in Indian airlines.

On the global front, leading global credit rating agency, Fitch ratings said on Tuesday that the debt ridden Italian economy is the major risk to the 17-member Eurozone economy amid its mounting debt burden and surging borrowing costs. The rating agency warned that it may downgrade the credit rating of Italy by the end of this month.

On the Asian front, Shanghai Composite closed down 0.42%, Hang Seng ended up 0.78% and Nikkei 225 ended higher by 0.30% on Wednesday.

On the Economic front, CAC40 was up 0.15%, DAX was down 0.20% and FTSE 100 was down 0.30% on Wednesday.

On the Corporate front, the Indian government on Wednesday ruled out a rescue package for cash strapped Kingfisher Airlines. The negative news was offset by hopes that government may allow FDI in Indian carriers. The stock of the airline ended up 4.27% at Rs 22 on the BSE on Wednesday.

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