Post Session-Sensex snaps winning streak, sheds 370 points Analysis for Jan 30, 2012

Today, the key domestic benchmarks ended on a bearish note, snapping their six -day winning streak as weak global cues weighed on sentiment. The Capital goods and Power space led the decline.

BSE SENSEX closed at 16863.3 down by 370.68 points or by 2.15 % and then NSE Nifty ended at 5087.3 down by 117.4 points or by 2.26 %.The BSE MIDCAP closed at 5756.98 down by 115.38 points or by 1.96 %, while the BSE SMLCAP ended at 6373.59 down by 118.1 points or by 1.82 %.The BSE Sensex touched intraday high of 17138.04 and intraday low of 16828.33 The NSE Nifty touched intraday high of 5166.15 and intraday low of 5076.7.

The weak closing of the US markets on Friday weighed on domestic sentiment during morning trade. On Friday, the Dow Jones Industrial lost 74.17 points and closed at 12660.46. The S&P 500 lost 2.11 points and closed at 1316.33 and the Nasdaq closed at 2816.55, gaining 11.27 points over the previous day's closing. Soon after witnessing a gap down opening, the domestic benchmarks slipped further amid weak Asian market cues. Asian markets traded on a negative note on Monday as investors were cautious ahead of a summit of EU leaders to discuss the region's deepening debt turmoil. The EU summit at Brussels on Monday will focus on the finalization of a fiscal compact for Euro area economies aimed at tighter budgetary control. The European policymakers are also likely to agree on the creation of a 500 billion euro eurozone permanent bailout fund this year. Sentiment was subdued as investors await the all-important deal between Greece and its private creditors likely to be finalized this week. Investors were also cautious ahead of the Italian bond auction on Monday. Chinese shares fell after the country's central bank refrained from further monetary easing last week by maintaining its existing bank reserve rations. Moreover, lower than expected US Q4 GDP growth also weakened sentiment. The domestic benchmarks continued their slide during afternoon trade and dipped below the 17K mark amid weak Asian market cues. The benchmarks stumbled in the final couple of hours of the session amid heavy selling across European markets. Finally, the domestic benchmarks closed on a weak note, with the Sensex and the Nifty shedding over 2% each. Among the BSE Sectoral indices, BSE Capital Goods and BSE Power lost 5.55% and 3.54% respectively.

Among the 30 Sensex stocks, BHEL, Sterlite Industries, L&T, Hindalco Industries and Mahindra & Mahindra ended down 10.41%, 5.99%, 5.37%, 4.81% and 4.71% respectively. Among the Sensex stocks, there were 5 advances and 2 declines. On BSE out of total shares traded 2981, shares advanced were 1037 while 1842 shares declined and 102 were unchanged.

On the Economic front, business confidence in India declined in the third quarter of 2011-12, compared to the previous quarter amid a worsening global economic outlook, high interest rates and elevated input costs, a report by the Confederation of Indian Industry (CII) said on Sunday.

On the Global front, the Spanish economy is on the brink of a recession after contracting 0.3 per cent in the last quarter of 2011. Domestic demand fell sharply last quarter as severe austerity measures, financial market turmoil and surging unemployment took heavy toll on consumer confidence.

On the Asian front, Shanghai Composite ended down 1.47%, Hang Seng closed lower by 1.66% and Nikkei 225 lost 0.54% on Monday.

On the European front, CAC 40 was down 0.95%, DAX was down 0.53% and FTSE 100 was trading lower by 0.74% on Monday.

On the Corporate front, the stock of BHEL plunged by 10.41% at Rs 245.15 on the BSE after the company reported a negative order inflow in the last quarter.

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