Local bourses prune partial losses; broader indices showcase diverse trend

Domestic barometer gauges trimmed partial losses as traders rolled over positions in the futures and options (F&O) segment from the near-month September 2011 series to October 2011 series. Earlier in the trade today, bourses prolonging the previous session solemn mood dumped the risky equities as investors again began to doubt Europe's ability to cauterize its worsening debt crisis. However, support which came at lower levels at the bourses mainly placed a lid to the loss of the bourses, besides trimming it. Global leads too were nothing short of disenchantment. Overnight, on Wall Street, the Dow Jones industrial average fell 1.6 percent to close at 11,010.90. The Standard & Poor's 500 index fell 2.1 percent to 1,151.06 and Nasdaq composite index fell 2.2 percent to 2,491.58. Meanwhile, the Asian shares too were trading mixed on Europe anxieties. However, the US future indices pointed to a positive start of Wall Street on Thursday. Back home, some strength was injected in counters of Fast Moving Consumer Goods (FMCG) and TECk, besides Information Technology (IT). However, stocks from Capital Goods (CG), Metal and Consumer Durables (CD) space remained the major pocket of weakness.  The 30 share sensitive index- Sensex-losing over 75 points was trading above 16300 mark. Meanwhile, the 50 share index- Nifty-sliding close to 25 points was trading above 4900 mark. The broader indices, however showcasing diverse trend, had lost some ground to the selling pressure as both midcap and smallcap index were down with a cut of 0.40% each. The overall market breadth on BSE bowed down in the favour of declines which outpaced advances in the ratio of 1297:745, while 72 shares remained unchanged.

The BSE Sensex is currently trading at 16,370.62, down by 75.40 points or 0.46%. The index has touched a high and low of 16,394.86 and 16,316.66 respectively.  There were 8 stocks advancing against 22 declines on the index.

The broader indices too were trading in the red; the BSE Mid cap and Small cap indices were down by 0.76% and 0.42% respectively. 

IT up by 0.28%, FMCG up by 0.24% and TECK up by 0.02% remained the gainers on the index. Meanwhile, CG down by 1.63%, Metal down by 1.55%, CD down by 1.35%, Realty down by 1.30% and PSU down by 0.95% were the top losers on the index.

The top gainers on the Sensex were Jaiprakash Associates up by 2.14%, HDFC Bank up by 1.82%, HDFC up by 1.35%, Infosys up by 0.79% and Bajaj Auto up by 0.61%

On the flip side, L&T down by 2.40%, DLF down by 2.39%, Coal India down by 2.28%, SBI and Tata Motors down by 2.28% were the top losers on the index.

Meanwhile, the elevated level of international oil prices and recent depreciation in the rupee has narrowed the scope for the Reserve Bank of India’s (RBI) monetary policy response, and it has made strong case of another hike in the RBI’s short term leading and depositing rates. The RBI Deputy Governor Subir Gokarn said 'oil prices have remained very steady despite global economic concerns while in 2008 (when recession hit the global economy) they declined sharply in a small period. It reduces space that monetary policy has in dealing with the situation.'

In order to curb inflation, the RBI has increased its key policy rates by 12 times in last 18 months. The apex bank is scheduled to review its second quarter monetary policy review on October 25. The RBI Deputy Governor’s statement on the monetary policy comes just after Governor D Subbarao defending the tight monetary stance of the RBI to control inflation, which has been hovering near the two digit mark despite the 12 times hike in interest rates.

Since March 2010, the RBI has increased its short term borrowing rates by 350 basis points or 3.5%, however, inflation has remained at elevated level and it has been above 9% from last 9 months, which is 4-5% above the apex bank’s comfort zone. 

The recent depreciation in the rupee is also expected to fuel the inflation in the domestic economy.  The depreciating rupee will increase the cost of import of crude oil, making strong case of another hike in fuel prices in domestic market. The state owned oil marketing companies has increased the petrol prices by Rs 8 in last six months, and diesel by Rs 3. International oil prices have remained persistently high. Brent Crude oil was trading at over $107 a barrel despite fears of double-dip recession hitting global economy.

D Subbarao at an event in New York said 'at this high level, inflation is unambiguously inimical to growth; it saps investor confidence and erodes medium term growth prospects.' 

The S&P CNX Nifty is currently trading at 4,922.55, down by 23.55 points or 0.47%. The index has touched a high and low of 4,929.80 and 4,906.00 respectively.  There were 16 stocks advancing against 34 declines on the index.

The top gainers of the Nifty were JP Associates up by 2.21%, HDFC Bank up by 1.66%, HDFC down by 1.43%, Grasim Industries up by 1.42% and HCL Technologies up by 1.17% and.

Cairn India down by 2.79%, DLF down by 2.52%, Tata Motors down by 2.50%, Sterlite Industries down by 2.45% and SBI was down by 2.35%, were the major losers on the index.

Asian markets were trading mixed; Jakarta Composite was up by 0.14%, KLSE Composite up by 0.46%, Seoul Composite up by 2.02% and Taiwan Weighted up by 0.92%

On the flip side, Shanghai Composite down by 0.83%, and Straits Times down by 0.17% and Nikkei 225 was trading flat with no profit no loss situation.