Benchmarks edge lower on disappointing results and weak global cues
The key equity indices edged lower on Friday tracking lower-than-expected results from frontliners — ONGC and Hero Honda — and feeble global cues. The markets remained in a tight range during first half of the session with modest cuts but weak European shares and lower US index futures triggered fresh selling back home in the latter half. Investors opted to take some profit off the table ahead of release of quarterly gross domestic product (GDP) data in the US later in the day. Analysts are expecting slowdown in the world???s largest economy during the second quarter. Back home, selling pressure remained broad-based with realty, technology and capital goods counters taking most of the beating from the bears. On the other hand, the mid-cap and small-cap stocks outperformed their larger counterparts in trade.
After starting the session on a flat note, the main indices slipped in the negative terrain tracking weakness across regional peers. They gyrated in a narrow range with a negative bias till late-morning trades. The markets showed some signs of recovery in the early noon-session but flat-to-negative start for the European shares once again pulled the local indices lower. The selling pressure got intensified in late trades and the main bourses touched their fresh intraday lows in lat half an hour of trade and finally logged of the session near those levels. The BSE???s 30-share Sensex and NSE???s 50-share Nifty had regained the psychological 18,000 and 5,400 levels respectively during the day???s trade but failed to hold on to these points. The market breadth on the BSE turned negative in late-trades; the losers outnumbered the gainers in a ratio of 1592:1325 while 127 shares remained unchanged.
From blue-chip stocks, M&M, SBI and HDFC Bank topped the gainers list while Bharti Airtel, Hero Honda and DLF languished at the bottom of the list.
Index heavyweight, ONGC, finished on a flat note after witnessing sharp cuts in early trades. The state-owned company posted a net profit of Rs 3,661.14 crore for the quarter ended June 30, 2010 against Rs 4,847.92 crore for the quarter ended June 30, 2009, down 24.48%. Its total income for the reporting quarter declined by 10.64% to Rs 14,230.22 crore from Rs 15,924.08 crore for the year ago period.
Finally, the BSE Sensex declined 123.71 points or 0.69% to end at 17,868.29 while the S&P CNX Nifty shed 41.30 points or 0.76% to finish at 5367.60.
The BSE Sensex touched a high and a low of 18,000.35 and 17,838.92, respectively.
M&M up 2.70%, SBI up 1.24%, HDFC Bank up 1.22%, Tata Steel up 0.68% and HDFC up 0.22% were the main gainers on BSE Sensex.
The top losers on the Sensex were Bharti Airtel down 3.17%, Hero Honda down 2.95%, DLF down 2.59%, ICICI Bank down 2.38% and Tata Motors down 2.26%.
BSE Mid-cap and Small-cap indices were up 0.35% and 0.20% respectively.
Meanwhile, Minister of state for finance, S.S. Palanimanickam has said in a written reply in parliament that it would be premature to raise tax on iron ore exports, providing a temporary relief to exporters and miners of the commodity. India last raised the export duty on iron ore lumps in April to 15% from 10%. While in Last December last year it slapped a 5-percent export duty on iron ore fines.
The minister stated that ‘The union steel ministry has recommended a regime of export duty on iron ore as one of the measures to check the price rise and increase domestic availability of iron ore.’ ‘However, since export duty had been increased on iron ore lumps from 10 (percent) to 15 percent on 29th April, it was felt that any further change so soon, would be premature.’
The steel industry has frequently lobbied for a ban on iron ore export or at least for further raising the export duty on it so that more of the commodity is available for local use at low prices. A day earlier JSW Steel, the country’s largest private steel maker by domestic capacity, has sought banning iron ore export in a phased manner in next five years. The company???s Vice-Chairman and Managing Director Sajjan Jindal said that ‘Iron ore exports should be gradually banned. I would say that there should be a calibrated approach towards banning it, say in next five years bring down export of iron ore to zero,’
Karnataka Chief Minister B S Yeddyurappa and Steel Minister Virbhadra Singh had already sought imposition of ban on such shipments saying the move may help curbing illegal mining practices in the country. The ministers rather called for value-addition on the mineral in the country.
Realty down 1.40%, TECk down 1.22%, Capital Goods (CG) down 1.14%, IT down 1.13% and Power down 0.89% were the main losers in the BSE sectoral space.
On the other hand, there were no gainers on the BSE sectoral space.
In a bid to encourage trade and investment ties with UK, the government of India has invited British investments into India???s infrastructure sector, which is expected to grow at brisk pace in the next decade. India has also invited investments in the segments like food processing and clean technology.
India???s strong growth trajectory which has one of the largest markets in the world will require huge investments in infrastructure in order to sustain the high level of growth. Anand Sharma, the Union Minister for Commerce and Industry highlighted on Thursday ??????we have huge demands of infrastructure and all projections indicate that we will be in a position to absorb $ 1.7 trillion in infrastructure over the next decade. British companies have established expertise in building world-class infrastructure and we will look forward to greater partnership, greater collaboration and assistance in this endeavour???.
The S&P CNX Nifty touched a high and a low of 5413.25 and 5349.20, respectively.
The major gainers on the Nifty were HCL Tech up 3.69%, Idea up 2.77%, M&M up 2.54%, Ranbaxy Lab up 1.80% and HDFC Bank up 1.21%.
The major losers on the index were ABB down 4.14%, GAIL down 3.26%, Hero Honda down 3.17%, RPower down 2.97% and ICICI Bank down 2.94%.
Asian equity markets finished mostly in the negative terrain on the last trading day of the week as investors lost their confidence tracking weak global cues. Japan???s unemployment rate increased to its seven-month high of 5.3% in June as compared to 5.2% in the earlier month while the market sentiments were also weighed down by lesser-than-expected fall in US jobless claim data.
Shanghai Composite declined 10.61 points or 0.40% to 2,637.50, Hang Seng dipped 64.01 points or 0.30% to 21,029.81, Jakarta Composite dropped 27.54 points or 0.89% to 3,069.28, Nikkei 225 tumbled 158.72 points or 1.64% to 9,537.30, Straits Times fell 9.95 points or 0.33% to 2,987.70, Seoul Composite was down 11.55 points or 0.65% to 1,759.33 and Taiwan Weighted shed 38.36 points or 0.49% to 7,760.63.
On the flip side, KLSE Composite advanced 2.51 points or 0.18% to 1,360.92.
European markets were trading in the red on Friday. France???s CAC 40 was trading at 3,629.67, down 22.24 points or 0.61%; Germany???s DAX 30 was trading at 6,091.07, down 43.63 points or 0.71% and Britain???s FTSE 100 was down 28.49 points or 0.54% at 5,285.46.
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