EOD REPORT FOR 8th JULY

Just when the Indian frontline equity indices looked set for another close in the flat trajectory after Thursday's surprise close to 2% rally, suddenly took a turn for the worse and headed for a disastrous close. Sentiments got spooked minutes after HDFC, India's largest mortgage company by assets, announced its first quarterly earnings numbers which were slightly below the street expectations. The benchmarks oscillated in a very narrow range around the psychological 19,000 and 5,700 levels for most part of the session however it seemed like the bears had the last say as they dragged the key indices in late trade. Position squaring gathered greater force in the metal and mining counter in the dying hours in reaction to the approval of the Daft Mines and Mineral Development and Regulation (MMDR) Bill 2011, which called for coal miners to share up to 26% of their profits with people directly affected, in a bid to smoothen the land acquisition process. The group of ministers also agreed for a proposal for 100% of the royalty paid by major mineral mining companies, to compensate people displaced by such projects. Investors also remained cautious a day after Dayanidhi Maran's resignation, as the focus shifted on Prime Minister Manmohan Singh's bid to refurbish his cabinet's image through a reshuffle of portfolios this weekend. On the global front, European counterparts erased all their gains, ahead of a US Labor Department report expected later in the session while the Asian markets on the other hand settled on a mixed note, failing to give any firm direction to the local bourses.
Earlier on the Street, the benchmark got off to a positive start, touching high point of the session in the initial trades itself as it drifted into the red terrain in no time and then failed to claw back into the green through the day. Though, the indices gathered some courage to break into the green terrain in the early noon trades, however hefty bouts of board profit booking across the in late trade ensured that the benchmarks snap the session with large cuts of over a percent. The NSE's 50-share broadly followed index Nifty, shaved off over a percent and settled above the crucial 5,650 support level while Bombay Stock Exchange's Sensitive Index, Sensex took a nasty two hundred points blow and closed below the psychological 18,900 mark. By the end of trade, the broader markets which showed some resilience in early trades capitulated by the end of session. The midcap index eased 0.61% while the smallcap index shed 0.86%. On the sectoral front, the Metal stocks languished at the bottom of the table after being clobbered by 3% as majors like Tata Steel and Hindalco deposed 1.97%, and 3.73% respectively. The PSU pocket too witnessed hefty bouts of profit booking and slipped by 1.72% after majors like Coal India and MMTC sank by 8% and 2.64% respectively. On the other hand only high beta Realty counter managed to shut shop in the green terrain as bellwethers like Unitech and DLF surged by 4.43% and 1.22% respectively by the end of trade. Meanwhile, shares of SKS Microfinance once again skyrocketed by 20% and hit the upper circuit limit as investors continued to rejoice on government's decision that the Reserve Bank of India will be regulating the India's microfinance sector. On the result corner, lenders like HDFC and Indusind Bank announced their first quarterly earnings numbers and painted a mixed picture for the markets despite posting largely results on expected lines. On one hand HDFC plummeted by about 1.50% while on the other Indusind climbed by three fourth of a percent. The markets plunged on stronger volumes of over Rs 1.17 lakh crore while the turnover for NSE F&O segment also remained on the higher side compared to Thursday at over 1.01 lakh crore. The market breadth remained negative as there were 1127 shares on the gaining side against 1757 shares on the losing side while 121 shares remained unchanged.
Finally, the BSE Sensex plunged by 220.26 points or 1.15% and settled at 18,858.04, while the S&P CNX Nifty lost 68.30 points or 1.19% to settle at 5,660.65.
The BSE Sensex touched a high and a low of 19,131.70 and 18,817.71 respectively. 8 stocks advanced against 22 declining ones on the index.
The BSE Mid-cap index lost 0.61% while Small-cap index was down by 0.86%.
On the BSE Sectoral front, Realty up 2.08% was the only gainer. On the flip side, Metal down 2.99%, PSU down 1.72%, FMCG down 1.14%, Oil &Gas down 1.13% and Bankex down 1.11% were the top losers.
The top gainers on the Sensex were DLF up 1.22%, Hero Honda up 1.01%, ONGC up 0.42%, Bharti Airtel up 0.14% and Maruti Suzuki up 0.14%.
On the flip side, Sterlite Industries down 3.94%, Hindalco down 3.73%, JP Associates down 3.04%, ICICI Bank down 2.71% and Jindal Steel down by 2.54% were the top loser on the index.
Meanwhile, the new mining Bill - approved by a 10-member Group of Ministers (GoM) headed by Finance Minister Pranab Mukherjee on July 7, approved the Daft Mines and Mineral Development and Regulation (MMDR) Bill 2011, which recommends to make it compulsory for coal miners to share their 26% of profits to project affected people, whereas companies mining other resources like iron ore, bauxite and limestone, will be required to pay 100% of royalty on their production on the original inhabitants of the projects.
The MMDR bill, approved by GoM will be sent to cabinet for approval. The bill requires parliamentary approval after passing by cabinet to become a law. It will be applicable to new projects. Earlier, the ministry of coal has opposed the linking of profit sharing to royalty. Coal Minister Prakash Jaiswal had said that this would impact the profitability of coal companies. 
This move of government is not liked by the industrial bodies, as the decision of profit sharing will reduce the revenue of companies and increase the business cost. The 26% of profit sharing would cost around Rs 9,000 crore to the mining industry. However, the decision of profit-sharing is expected to make it easier for mining projects to win local approval and accelerate the pace of developments. Years of protests, have delayed many industrial projects, including South Korean steel maker POSCO's plant in Orissa, the biggest foreign direct investment in India at $12 billion.
India's mining sector has only opened up fully to private investors in recent years and state-run companies have lacked the funds and expertise to probe deeper than the top 50 metres or so where its iron ore and coal reserves are found.
The S&P CNX Nifty touched high and low of 5,740.40 and 5,651.05 respectively. 11 stocks advanced against 39 declining ones on the index.
The top gainers on the Nifty were Siemens up by 2.60%, Ranbaxy up 1.43%, ONGC up 0.69%, Cairn India up 0.61% and Bharti Airtel up 0.50%.
On the other hand, Sesa Goa down 4.40%, SAIL down 4.08%, Grasim down 4.04%, Hindalco down 3.91% and Sterlite Industries down 3.85% were the top losers.
On the back of increased demand from western markets India's exports for June increased by 46.4% to $29.2 billion, on the other hand, imports too registered a growth of 42.4% to $36.9 billion, leaving a trade deficit of $7.7 billion for the month of June.
The Commerce Secretary Rahul Khullar said, '$29.2 billion figure is a very, very high number for exports. Virtually all sectors grew well".
In the first quarter of current financial year, exports grew by 45.7% to $79 billion and imports increased by 36.2 % to 110.6 billion, however, trade deficit for the first quarter stood at $31.6 billion. The exporting sectors that registered strong growth during the quarter include engineering, petroleum products, gems and jewellery, readymade garments and electronics.
Continuing with its upward trend, India's handicraft exports too recorded a 18% growth year-on-year at $555 million during the first quarter of the current financial year due to exploration of new markets and increased demand in the traditional western markets. During April-June 2010-11, the labour intensive sector exported goods worth $469.80 million. "The growth in exports is mainly from the US and European markets.

In June, overseas shipments grew by 22.34% to $166.66 million from $136.23 million in the same month last year. The main items in the handicrafts segment which registered healthy growth during April-June 2011-12 include art metalware, woodware and imitation jewellery. The sector employs almost 76 lakh people.

The European markets are trading mixed, with the France's CAC 40 down 0.02%, Germany's DAX up 0.34% and FTSE 100 up by 0.11%.
Most of the Asian equity indices finished the day's trade in the positive terrain on Last trading day of the week as US markets closed higher overnight on getting good jobs and rebound in retail sales reports, which fuels hope that the recovery in the world's number one economy is back on track. A firm trend in commodity prices is too supported the upbeat sentiments. The Nikkei average hit a four-month peak and snapped the day's trade with a gain of over half a percent on Friday, led by gains in construction stocks after a brokerage upgrade.