Post Session-Sensex extends losing streak on inflation data, Greek woes Analysis for May 14, 2012

Disappointing inflation data led to heavy selling on domestic bourses today as the Sensex erased earlier gains to end lower, extending its four-day losing streak . Acceleration in inflationary pressures dampened the scope of another rate cut to boost growth in Asia"s third largest economy. India"s annual inflation stood at 7.23 per cent in April 2012, compared to 6.89 per cent in March 2012. Weak global cues also added to the negative sentiment as Asian stocks and European stocks fell on concerns that Greece may be squeezed out of the Euro as the nation struggles to form a government. The deepening worries over the political impasse in Greece eroded the appeal of risky assets including stocks as investor cut back their exposure to risky assets amid rising global risk aversion.

BSE SENSEX ended at 16,215.84, down by 77.14 points or by 0.47 per cent and the NSE Nifty closed at 4,907.8, down by 21.1 points or by 0.43 per cent.

The BSE Sensex touched intraday high of 16,390.33 and intraday low of 16,124.82 The NSE Nifty touched intraday high of 4,957.2 and intraday low of 4,874.5.

Meanwhile, the BSE MIDCAP ended at 5,888.95, down by 59.76 points or by 1 per cent, while the BSE SMLCAP closed at 6,314.57, down by 80.81 points or by 1.26 per cent.

After witnessing a gap up opening, led by buying in metal, banking and auto stocks, the Sensex reversed direction and slipped into the negative terrain as disappointing inflation data dimmed the chances of another interest rate cut. The benchmarks fell deeper into the red as weak global cues escalated selling pressure. However, the benchmarks trimmed losses in late trade led by buying in IT and Healthcare stocks.

On the Sectoral front, Oil& Gas and Banking shed 1.69 per cent and 1.61per cent, respectively. Out of the 30 Sensex stocks, there were 15 advances and 15 declines. The Market breadth, indicating the overall health of the market, was weak. BSE out of total shares traded 3543, shares advanced were 1080 while 1697 shares declined and 766 were unchanged.

The top losers of the BSE Sensex pack were DLF Ltd. (Rs. 182.35,-2.64%), Tata Motors Ltd. (Rs. 290.20,-2.42%), Reliance Industries Ltd. (Rs. 681.15,-2.32%), HDFC Bank Ltd. (Rs. 500.50,-2.02%), Bharat Heavy Electricals Ltd. (Rs. 216.75,-1.99%), among others.

Among the Asian bourses, Shanghai Composite ended down 0.60 per cent, Hang Seng closed down 1.15 per cent and Nikkei 225 closed up 0.23 per cent.

Among the European bourses, CAC 40 was down 2.41 per cent, DAX was down 2.20 per cent and FTSE 100 was trading lower by 1.94 per cent at 16:44 PM IST.