Thursday, November 13, 2008

Nifty ends below 2800

Sustained selling pressure and no buying support saw equities close with heavy losses Wednesday but off day’s lows. Traders were cautious

to carry over fresh positions ahead of festive holiday on Thursday and inflation data.

Market opened with a gap-down trailing other Asian markets and continued to be subdued due to lack of conviction. Investors waited for data on industrial growth to take directional call.

Industrial output for September grew at 4.8 per cent, higher than 1.42 per cent in August but down from 7 per cent in September 2007. The main factor for decline in growth was the manufacturing sector, which grew just 4.8 per cent versus 7.45 per cent last year--clearly indicating effects of economic slowdown.

This resulted in a short-lived spike in the market followed by a sharp sell-off. Bombay Stock Exchange’s Sensex closed at 9,536.33, down 303.36 points or 3.08 per cent. The index touched an intra-day low of 9376.73 and low of 9376.73.

National Stock Exchange’s Nifty broke the support of 2800 and touched an intra-day low of 2794.95 before closing 3.07 per cent lower at 2848.45.

BSE Midcap Index fell 2.25 per cent and BSE Smallcap Index closed 1.92 per cent lower.

“Traders squared long positions and created fresh shorts. It’s a traders market and investors should wait till the third quarter results are out. We are likely to see new lows by January,” said Sarfaraz Vakil, associate vice president, India Infoline.

Biggest Sensex gainers were Tata Consultancy Services (1.04%) and Infosys Technologies (0.29%).

Losers comprised Jaiprakash Associates (-9.13%), DLF (-8.61%), ICICI Bank (-8.35%), Reliance Infstrastructure (-6.53%) and Hindalco Industries (-5.75%).

BSE Realty Index fell 7.34 per cent, BSE Bankex fell 4.38 per cent and BSE Metal Index closed 3.67 per cent lower.

“Realty stocks have fallen over 80 per cent from their highs and further downside looks limited. Investors with long-term perspective can buy scrips which are available at attractive valuations,” he added.

Traded volume was slightly better. As per the NSE website, 6135.79 lakh shares were traded against 5708.84 lakh shares on Tuesday. Market breadth was negative on the BSE with 1,701 losers and 818 gainers.

Market will remain shut Thursday on account of Guru Nanak Jayanti. Traders will eye inflation data which is forecast to have fallen to around 10.4 per cent for the week ended Oct 30.

Meanwhile, European markets were in the positive terrain after a weak opening. FTSE 100 was up 1.32 per cent, DAX 30 up 0.70 per cent and CAC 40 was up 0.92 per cent higher.

US stocks are also expected to open higher later Wednesday. Dow Jones stocks futures were up 0.44 per cent, S&P 500 stocks futures gained 0.63 per cent and Nasdaq stocks futures was up 0.18 per cent.

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