DOWNTREND CONTINUES

Indian benchmark indices have staged a lackadaisical performance in today's volatile trading session after initially see-sawing in a narrow band and finally settling with moderate cuts around the crucial support levels of 5,400 and 18,100. The tepid close looked shoddier because of the fact that markets across the globe displayed energetic performance and rallied on bottom fishing after two successive days of sharp decline. Massive selling by FIIs in the past couple of trading sessions along with risks of towering inflation and rise in interest rates capped the upside chances for the frontline indices. The slightly better than expected earnings announcement of two-wheeler major Bajaj Auto too failed to ease the nerves as the stock already reeled under pressure on reports that the government decided to end DEPB tax incentive scheme for exporters on June 30 as the export industry in Asia's third-largest economy was doing well and needed no incentives. Investors also continued to ruthlessly batter the Oil and Gas majors like RIL and ONGC while the country's top lender SBI too was not spared either. While the only blessing in disguise for the markets was falling commodity prices, especially international crude which India imports to the extent of over 75% for domestic consumption. The NSE's 50-share broadly followed index, Nifty settled near the psychological 5,400 support level while the Bombay Stock Exchange's Sensitive Index Sensex shaved off around a quarter percent points and ended the day below the psychological 18,100 level. The broader markets too exhibited weak trends and underperformed their larger peers by quite a margin. The midcap index eased 0.61% and the smallcap index fell 0.80% points. On the BSE sectoral space, the Oil and Gas counter, once again languished at the bottom of the table with huge losses of 1.88%, after taking a nasty laceration of 3.23% in the previous session. While the sustained profit booking in PSU, Healthcare and rate sensitive sectors like Auto, Realty and Bankex too pummeled the indices into the negative territory. On the other hand the Information Technology pack saw some buying interests as it advanced 0.24% supported by 1.71% and 0.80% gains in Wipro and TCS respectively. While the FMCG counter too managed to keep its head above the water and settled with 0.20%. On the result front, stocks like Orchid Chemicals and eClerx Services got commended by the investors in the session.

On the global front, all Asian equity indices managed to settle in the green terrain today as investors turned to bargain hunting after the recent losses in the markets. South Korean benchmark remained the top gainer in the space after surging one and half a percentage points lifted by advances in automakers and shipbuilders including Hyundai Motor and Daewoo Shipbuilding and Marine Engineering. The European counterparts too got off to a sanguine start and amassed over a percent point in the initial moments. However, some sense of weakness can be seen in the markets there as they all have come off the intraday high levels and France's CAC 40 traded with gains of 0.95%, Germany's DAX added 0.53% and London's FTSE 100 gained 0.75%. On the other hand, the screen trading for US index futures too indicated that the Dow could open on a flat to positive note.

Earlier on Dalal Street, the benchmark got off to an optimistic start in line with the Asian peers which bounced back, bucking the weak leads from overnight Wall Street which extended its fall on getting weak economic reports and disappointing earnings number by the world's largest technology company HP. After see-sawing around the neutral line in extremely narrow range through the first half, the indices took a sharp cut in the initial moments afternoon session, dragged by stocks from the ADAG, rate sensitive and sugar pockets. However, soon after testing intraday low levels of 5,400 and 18,000 the indices saw some short covering as they went on to sneak in to the green for a brief period. But profit booking in the dying hours ensured that the markets conclude third straight session in the red zone around the psychological 5,400 and 18,100 levels. Markets slipped on volumes of over Rs 1.33 lakh crore while the turnover for NSE F&O segment remained lower compared to Tuesday at over 1.20 lakh crore. Market breadth remained negative as there were 1018 shares on the gaining side against 1751 shares on the losing side while 142 shares remained unchanged.

Finally, the BSE Sensex shed 51.15 points or 0.28% to settle at 18,086.20 while the S&P CNX Nifty slipped 18.35 points or 0.34% to end at 5420.60.

The BSE Sensex touched a high and a low of 18,218.20 and 18,020.79, respectively. The BSE Mid-cap and Small-cap indices declined 0.61% and 0.80% respectively.

The top gainers of the Sensex were HDFC up 2.34%, Hero Honda up 1.93%, Maruti Suzuki up 1.75%, Wipro up 1.71% and Tata Power up 1.50%.

On the flip side, Rel Infra down 4.11%, Tata Motors down 3.36%, RCom down 3.31%, SBI down 2.40% and JP Associates down 2.23% were the major losers on the index.

The top losers in the BSE sectoral space were Oil & Gas down 1.88%, PSU down 1.77%, Healthcare (HC) down 1.40%, Auto down 0.98% and Realty down 0.92%.

On the flip side, IT up 0.24%, FMCG up 0.20% and TECk up 0.12% were the only gainers in the BSE sectoral space.

Meanwhile, by 2025, global economic growth will predominantly be generated in emerging economies. Countries like China, India, Brazil, Russia, Indonesia and South Korea (The BRIICKs) will account for more than half of all global growth and the international monetary system is less likely to be dominated by an single currency by 2025. The WB report, Global Development Horizons 2011 - Multipolarity: The New Global Economy, projects that as a group of emerging economies will grow on average by 4.7% a year between 2011 and 2025. Advanced economies, meanwhile, are forecast to grow by 2.3% over the same period, yet will remain prominent in the global economy, with the euro area, Japan, the United Kingdom, and the United States all playing a core role in fueling global growth.

"The fast rise of emerging economies has driven a shift whereby the centers of economic growth are distributed across developed and developing economies - it's a truly multi-polar world," said Justin Yifu Lin, the World Bank's chief economist and senior vice president for development economics. 

The WB report highlights the diversity of potential emerging economy growth poles, some of which have relied heavily on exports, such as China and Korea, and others that put more weight on domestic consumption, such as Brazil and India.

With the emergence of a large middle class in developing countries and demographic transitions underway in several major East Asian economies, stronger consumption trends are likely to prevail, which in turn can serve as a source of sustained global growth.

The shift in economic and financial power in the direction of the developing world has important implications on corporate financing, investment, and the nature of cross-border merger and acquisition (M&A) deals.

As more deals originate in emerging markets, South-South FDI is likely to rise, with most of it going into green-field investments, while South-North FDI is more likely to target acquisitions. As they expand, more developing countries and their firms will be able to access international bond and equity markets at better terms to finance overseas investments. To maintain growth and manage with more complex risks, economies that are home to emerging growth poles need to reform their domestic institutions, including in the economic, financial, and social sectors. Economies like China, Indonesia, India, and Russia all face institutional and governance challenges.  Human capital and ensuring access to education is a concern in some potential growth poles, particularly Brazil, India, and Indonesia.

The S&P CNX Nifty touched a high and a low of 5460.50 and 5401.25, respectively.

The top gainers of the Nifty were HDFC up 2.12%, Wipro up 1.71%, Hero Honda up 1.68%, Maruti Suzuki up 1.65% and Cairn India up 1.61%.

On the flip side, Reliance Infra down 4.23%, Tata Motors down 3.44%, BPCL down 3.25%, RCom down 3.20% and Gail down 2.61% were the major losers on the index.

European markets were trading in the green. France's CAC 40 rose 0.93%, Germany's DAX advanced 0.87% and Britain's FTSE 100 was trading higher by 0.89%.

All the Asian equity indices finished the day's trade on the higher note on Wednesday. Seoul remained the biggest gainer amongst the other peers gained more than one and a half percent after a four sessions of falls, lifted by advances in automakers and shipbuilders including Hyundai Motor and Daewoo Shipbuilding & Marine Engineering while, Japanese Nikkei rose about 1 percent today as receding worry over strong yen spurred short-covering, but further gains may be hard-won amid ongoing concerns about nuclear operator Tokyo Electric's compensation scheme.