Dismal end to the week - 04-MAY-2012

It was a dismal end to the week for the Indian market which saw intense selling pressure towards the latter part of the day on concerns that India was considering a review of the Double Taxation Avoidance Treaty with Mauritius. This led to a sudden crash which caused the Nifty to breach its 200 DMA and close with huge losses and below the 5100 mark. Metals, banks, capital goods and realty ended with deep cuts. Sensex shut shop at 16831, down 320 points and Nifty at 5086, down 101 points from the previous close. CNX Midcap index was down 1.9% and BSE Smallcap index was down 1.8%. The market breadth was negative with advances at 247 against declines of 1208 on the NSE. Top Nifty gainers were Cipla, Sun Pharma and Wipro while losers included Bank of Baroda, PNB and BHEL

This week the Indian market traded within a tight band for the most part until today when the indices broke out of the narrow range and proceeded downwards breaching all important levels. The benchmark indices were at the lowest point since January end this year with infrastructure being among the top losing sectors. This week's performance was poor and the numbers are: Sensex down 2.1% and Nifty down 2.9%. CNX Midcap index was down 2.8%, BSE Smallcap index down 2.4% over the week. BSE Realty index was down 3.4%, BSE Oil & Gas index down 1.8%, BSE Metal index down 4%, BSE Bankex down 3.8% and BSE Auto index down 5.6%.

Markets have extended losses in the noon deals on the back of persistent selling visible across the board. The Sensex has slipped below the 17,000 levels down 284points at 16,867 and the Nifty has slipped below 5,100 levels down 90 points at 5,098 levels.

Nifty continued to witness pressure at higher levels and closed below 5200 level on yesterday’s trade.This level has been acting as a strong support for couple of months and breaching of this level may bring in delta hedgers which can create fresh short positions which can drag Nifty to lower levels."

The Asian markets were trading on a subdued note. The Hang Seng was down 134 points at 21,115. While, Shanghai and Taiwan were trading higher with marginal gains. The European markets have also opened lower adding to the worries in the Indian markets. The CAC, DAX and FTSE are down 0.5% each in the opening deals.

Back home, BHEL is the top loser among the Sensex stocks, down 5% to Rs 214. Hero MotoCorp, Bajaj Auto, DLF, Larsen & Toubro, Tata Steel, State Bank of India, Hindalco, ICICI Bank, Gail India, HDFC Bank, Sterlite Industries, Jindal Steel and Maruti Suzuki are also among the prominent losers. On the other hand, Cipal and Wipro are among the few gainers.

The selling pressure is visible across the board. Capital goods, banking and realty stocks are amongst the worst hit in trades so far. The BSE Capital Goods index has shed 3% or 263 points at 8,991 levels. Bankex is down 2.25% or 262 points at 11,391 and the realty index has slipped 35 points to 1,634 levels. Metal, power, auto, PSU, consumer durables, IT, oil & gas and FMCG indices have also shed 0.7-1.8% each.

From the capital goods space, Alstom Projects, Larsen & Toubro, Pipavav Defence, Punj Lloyd, Praj Industries and Crompton Greaves are also trading lower by 2-4% each.

Among the banking stocks, Bank of Baroda, Punjab National Bank, Axis Bank, IDBI, Bank, Kotak Mahindra Bank, State Bank of India, Union Bank and ICICI Bank are among the top losers.

The broader markets are in line with the benchmark indices. The BSE mid-cap index is down 2% or 121 points at 6,113 levels and the small-cap index has shed 94 points at 6,615 levels.

The overall breadth is extremely negative as 1,865 stocks are declining while 665 are advancing.


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