SENSEX 17173.29
-189.58
NIFTY 5222.40 -57.95
USD/INR 0050.36 +00.52
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UPDATEDTIME 09.28 PM 05 MARCH 2012
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The Bombay Stock Exchange's Sensex
reacted sharply to the outcome of assembly elections in Uttar Pradesh (UP) and
closed over 500 points lower from day's high after it became apparent that
Mulayam Singh's Samajwadi Party (SP) would form the government on its
own without any support from Congress party.
It was a volatile day for the benchmarks, which moved higher in the morning, on expectations that alliance between SP and Congress in UP would help the UPA government to carry out reforms at the center. The Congress led UPA government has been facing stiff opposition on reform issues like FDI in retail not from only arch rival Bharatiya Janata Party but also from its allies like Trinamool Congress.
As the traders hopes got dashed following dismal performance of Congress, the market started correcting and slipped to important support levels.
It seems that Samajwadi Party can make government on its own in the state of Uttar Pradesh but the market was not expecting it. In fact, it was expecting an alliance between Congress and SP wherein it would have been a dream scenario where Congress could have pushed its reforms hard in the upcoming budget and also in the times to come. I guess market is a little bit in a downbeat mood following the election results.
The Sensex ended at 17173.29, down 189.58 points or 1.09 per cent. It touched intraday high of 17691.96 and low of 17128.28.
The National Stock Exchange's Nifty ended at 5222.40, down 57.95 points or 1.10 per cent. The broader index touched a high of 5382.05 and low of 5206.40 in trade today.
BSE Midcap Index was down 1.11 per cent and BSE Smallcap Index fell 1.29 per cent.
Weak cues from global peers on concerns of slowing Chinese economy, weak rupee and international oil prices also added to the woes.
There are reports that oil marketing companies are likely to announce fuel price hike following the recent spike in international oil prices.
Meanwhile, the Brent crude oil futures fell over a dollar on concerns of slowing global economy. However, it still remains a concern at $122.89 a barrel.
"If the crude prices continue to be above $120, fiscal deficit number is definitely going to be much higher and that also means that the Indian government has no option but to increase prices for the domestic market.
It means inflation numbers, which people are projecting to come down, may not decline to the same extent, which also means that interest rates, which the market is banking on, has another trigger for the market and may not play out fully.
So this crude oil is becoming a pretty big issue for the Indian market. It has serious implications for fiscal deficit, current account, inflation, everything, and unfortunately at this point of time India does not have too much in its defence
It was a volatile day for the benchmarks, which moved higher in the morning, on expectations that alliance between SP and Congress in UP would help the UPA government to carry out reforms at the center. The Congress led UPA government has been facing stiff opposition on reform issues like FDI in retail not from only arch rival Bharatiya Janata Party but also from its allies like Trinamool Congress.
As the traders hopes got dashed following dismal performance of Congress, the market started correcting and slipped to important support levels.
It seems that Samajwadi Party can make government on its own in the state of Uttar Pradesh but the market was not expecting it. In fact, it was expecting an alliance between Congress and SP wherein it would have been a dream scenario where Congress could have pushed its reforms hard in the upcoming budget and also in the times to come. I guess market is a little bit in a downbeat mood following the election results.
The Sensex ended at 17173.29, down 189.58 points or 1.09 per cent. It touched intraday high of 17691.96 and low of 17128.28.
The National Stock Exchange's Nifty ended at 5222.40, down 57.95 points or 1.10 per cent. The broader index touched a high of 5382.05 and low of 5206.40 in trade today.
BSE Midcap Index was down 1.11 per cent and BSE Smallcap Index fell 1.29 per cent.
Weak cues from global peers on concerns of slowing Chinese economy, weak rupee and international oil prices also added to the woes.
There are reports that oil marketing companies are likely to announce fuel price hike following the recent spike in international oil prices.
Meanwhile, the Brent crude oil futures fell over a dollar on concerns of slowing global economy. However, it still remains a concern at $122.89 a barrel.
"If the crude prices continue to be above $120, fiscal deficit number is definitely going to be much higher and that also means that the Indian government has no option but to increase prices for the domestic market.
It means inflation numbers, which people are projecting to come down, may not decline to the same extent, which also means that interest rates, which the market is banking on, has another trigger for the market and may not play out fully.
So this crude oil is becoming a pretty big issue for the Indian market. It has serious implications for fiscal deficit, current account, inflation, everything, and unfortunately at this point of time India does not have too much in its defence
The rupee weakened further and was
above 50 per dollar mark following bearish sentiments in the domestic stock
market. The partially convertible rupee was at 50.18 per dollar against
previous close of 49.83 per dollar.
Another important event that the market will keenly watch is the Reserve Bank of India's policy meet. The central bank is likely to announce CRR cut but it may not go ahead with rate cuts.
The clear expectation is that on March 15th, there will be a sort of CRR cut and that's pretty much on the cards given the sort of tightness in money markets right now. The key question is on the repo rates. The smart money is on probably nothing happening in the policy essentially because fuel prices are so high.
While the RBI may probably be inclined to reduce interest rates, they are held back a little by the high prices of oil right now and hence now the expectation is that it will probably be in the April policy that you would actually sort of start to see a sort of reduction in interest rates.
Amongst the sectoral indices, BSE Metal Index fell 3.88 per cent, BSE Power Index was down 2.38 per cent, BSE Capital Goods Index slipped 1.94 per cent and BSE Oil&gas Index moved 1.79 per cent lower. BSE FMCG Index moved 0.79 per cent higher and BSE IT Index gained 0.52 per cent.
Hindalco Industries (-5.75%), Sterlite Industries (-5.44%), Tata Steel (-5.40%), Tata Power (-4.11%) and Jindal Steel (-3.76%) were the major Sensex losers.
DLF (2.73%), ITC (1.45%), Infosys Technologies (1.41%), Maruti Suzuki (1.01%) and Coal India (0.67%) were the major index gainers.
Market breadth was negative on the BSE with 1048 gainers against 1773 losers.
Regards
Another important event that the market will keenly watch is the Reserve Bank of India's policy meet. The central bank is likely to announce CRR cut but it may not go ahead with rate cuts.
The clear expectation is that on March 15th, there will be a sort of CRR cut and that's pretty much on the cards given the sort of tightness in money markets right now. The key question is on the repo rates. The smart money is on probably nothing happening in the policy essentially because fuel prices are so high.
While the RBI may probably be inclined to reduce interest rates, they are held back a little by the high prices of oil right now and hence now the expectation is that it will probably be in the April policy that you would actually sort of start to see a sort of reduction in interest rates.
Amongst the sectoral indices, BSE Metal Index fell 3.88 per cent, BSE Power Index was down 2.38 per cent, BSE Capital Goods Index slipped 1.94 per cent and BSE Oil&gas Index moved 1.79 per cent lower. BSE FMCG Index moved 0.79 per cent higher and BSE IT Index gained 0.52 per cent.
Hindalco Industries (-5.75%), Sterlite Industries (-5.44%), Tata Steel (-5.40%), Tata Power (-4.11%) and Jindal Steel (-3.76%) were the major Sensex losers.
DLF (2.73%), ITC (1.45%), Infosys Technologies (1.41%), Maruti Suzuki (1.01%) and Coal India (0.67%) were the major index gainers.
Market breadth was negative on the BSE with 1048 gainers against 1773 losers.
Regards
RAKESH MAKIN
+91,
9041667797(DIRECT), 9915684997
OFF
0172-4657997
PANCHKULA (Haryana).
Email:makin_97@yahoo.com
Group mail id: makin97NSEtips@yahoogroups.co.in
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