Post Session- Sensex snaps winning streak, ends flat amid growth concerns Analysis for Jan 18, 2012

Posted By: Religare
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Today, the domestic benchmarks ended flat with a downward bias amid mixed cues from the Asian markets. The Metal and IT sectors were the major laggards.

BSE SENSEX closed at 16451.47 down by 14.58 points or by 0.09 % and then NSE Nifty ended at 4955.8 down by 11.5 points or by 0.23 %.The BSE MIDCAP closed at 5589.89 down by 65.43 points or by 1.16 %, while the BSE SMLCAP ended at 6195.7 down by 62.75 points or by 1 %.The BSE Sensex touched intraday high of 16517.96 and intraday low of 16384.48 The NSE Nifty touched intraday high of 4980.65 and intraday low of 4931.05.

The positive closing of the US markets on Tuesday failed to make a major impact on domestic sentiment during morning trade. On Tuesday, the Dow Jones Industrial gained 60.01 points and closed at 12482.07. The S&P 500 gained 4.58 points and closed at 1293.67 and the Nasdaq closed at 2728.08, gaining 17.41 points over the previous day's closing. The domestic benchmarks witnessed a gap down opening amid mixed cues from the Asian markets. Asian markets traded mixed on Wednesday after the World Bank slashed its global growth outlook to 2.5 per cent in 2012, down from 3.6 per cent estimated earlier and warned that a recession in Europe may cause financial turmoil worldwide and affect capital inflows to Asian economies. Moreover, China's FDI fell for a second straight month in December 2011, which weighed on sentiment. However, the successful Spanish and Greek debt auctions on Tuesday and a jump in investor confidence in Germany in January 2012 boosted sentiment across some markets. On the domestic front, growth concerns weighed on sentiment as the World Bank slashed India's growth in 2012 by 1.9 percentage points to 6.5 per cent.Morover, the disappointing earnings of IT bellwether TCS also weighed on sentiment. The benchmarks bounced back into positive terrain after a report said that the IMF is seeking to boost its lending capacity by USD 1 trillion to support the global economic recovery. However, the recovery was short-lived as the benchmarks slipped back into negative terrain amid subdued investor sentiment. The benchmarks traded range-bound in the negative terrain during afternoon trade. The domestic benchmarks slipped to the day's low as a weak rupee and growth concerns continue to make investors wary. The benchmarks pared off some of its losses in the final hour of trading amid positive opening in the European markets. Finally, the benchmarks ended on a slightly bearish note as the BSE Sensex and the NSE Nifty ended down by more than 0.05% each. Among the BSE Sectoral indices, BSE Metal and BSE IT ended down by 2.19% and 2.16% respectively.

Among the 30 Sensex stocks, Tata Steel, Coal India, Mahindra & Mahindra, BHEL and Wipro closed down by 4.05%, 3.22%, and 2.84%, 2.78% and 2.70% respectively. Among the Sensex stocks, there were 12 advances and 18 declines. On BSE out of total shares traded 2958, shares advanced were 1112 while 1733 shares declined and 113 were unchanged.

On the Economic front, the Empowered Group of Ministers (EGOM) on Tuesday approved 49 per cent FDI in Indian carriers to boost the ailing airline sector. The proposal is now likely to get the approval of the Cabinet and will be a big boost for the aviation sector and Indian economy in general.

On the Global front, Foreign Direct Investment (FDI) in Asia's largest economy, China, fell for the second straight month in December 2011 amid rising risk aversion among foreign investors due to the lingering debt crises in Europe and faltering global economic recovery, said a report by the Ministry of Commerce on Wednesday.

On the Asian front, Shanghai Composite ended down 1.39%, Hang Seng ended up 0.30% and Nikkei 225 closed up 0.99% on Wednesday.

On the European front, CAC40 was up 0.16%, DAX was up 0.38% and FTSE100 was trading higher by 0.03% on Wednesday.

On the Corporate front, Reliance Industries Limited has said that it is mulling a share buyback. The stock ended up 4.94% at Rs 776.90 on the BSE.

Read more about: bse, nse
Story first published: Wednesday, January 18, 2012, 18:20 [IST]
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