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Volatile markets end in red

November 16, 2011 16:34 IST

BSEMarkets ended in the red after turning volatile in the last hour of trade.

The Sensex languished on global cues throughout the morning.

However, it staged a partial comeback and touched a high of 16,878.

Selling pressure in Larsen & Toubro and Reliance dragged the index once again to a low of 16,642.

The Sensex finally ended down 107 points at 16,776. Nifty ended down 38 points at 5,030.

Asian markets ended lower on sustained worries of the Euro-zone debt crisis. Italy's benchmark sovereign yield was above the key 7% level.

The Bank of Japan cut its economic outlook on Wednesday, citing weaker global conditions, while voting unanimously to keep its interest-rate target at 0-0.1%, as expected.

Nikkei slumped 1% to 8,463. Hang Seng and Shanghai Composite dropped over 2% each. Markets in Seoul and Taiwan were also in red.

Meanwhile, India's services exports fell by 5.6% year-on-year to $11.22 billion in September, according to the Reserve Bank of India.

The country's total receipts from services exported stood at $11.89 billion in August, RBI data said. Moreover, Export Promotion Council for EOUs and SEZs (EPCES) data showed that exports from special economic zones (SEZs) grew 26.2% year-on-year to Rs 1.76 lakh crore during April-September this fiscal.

In other news, the cabinet has approved foreign direct investment of up to 26% in the pension sector, a government source told Reuters on Wednesday.

Capital goods index slipped 3.8% at 9,812 as more companies came out with muted corporate earnings. The index earlier slipped to a 30-month low of 9,712.

The slowdown in order inflow dragged down the capital goods stocks such as Bharat Heavy Electrical, Larsen and Toubro (L&T), Punj Lloyd, Suzlon Energy, Thermax and Crompton Greaves, which plunged more than 5%

each.

"Stocks like Larsen & Toubro and BHEL still look weak on the charts. Further 5% fall seems likely at these counters; however, look for shorting opportunity on bounces rather than at current market price," said Somil Mehta, Senior Technical Analyst (Equity), Sharekhan.

BSE power index shed 2% while the oil & gas and IT indices dropped 1% each in trades.

State-owned oil marketing companies (OMCs), including Bharat Petroleum, Hindustan Petroleum and Indian Oil were trading at their 52-week lows after reducing the price of petrol for the first time in 33 months by Rs 1.85 a litre to pass on to the consumer the benefit of a dip in the global crude oil price in the first fortnight of November.

BPCL shed 4%, HPCL slipped 5% while IOC dropped 2.5%.

Reliance dropped 1.6% at Rs 849.

The company has denied a newspaper report the energy major was in talks to buy a stake in cash-strapped Kingfisher Airlines. Kingfisher was up 14.5% at Rs 25.

HDIL fell 4.5% to Rs 75, extending 22.35% slump in the preceding five trading sessions, after MSCI said it will exclude the stock from the MSCI India Index with effect from 1 December 2011.

On the other hand, shares of companies included in MSCI index – Idea Cellular, Power Finance Corporation and Bharti Airtel were in limelight on the bourses. Idea and PFC added 4.5% each.

BSE market breadth was fairly negative. Out of 2,942 stocks traded, 1,927 shares declined and 906 shares advanced in trades.

Sohini Sen in Mumbai
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