The selling pressure seems to be intensifying with every passing second in the Friday afternoon trades as the frontline indices struggle to find a base amid steep sell-off in European markets which after opening on a weak note have plunged deeper into the red terrain. The BSE Sensex plunged over four hundred points from the high point of the day after European shares drifted on getting France's gross domestic product data which came in flat during the second quarter and missed expectations for a 0.3% rise, suggesting the nation's economy is stalling. On the domestic front, market men gave a muted response to the pleasantly surprisingly June IIP numbers which surged by 8.8% in June as compared to a nine-month low of 5.6% in May. The sharply higher reading failed in enthusing domestic investors as expectations are rife that the RBI will continue tightening policy in coming months until inflation peaks, despite increasing uncertainty over a global economic slowdown and an extended period of easy policy in the developed world. In the BSE sectoral space, the IT and TECk pockets seem to have done the maximum damage as they shaved off around two and half a percent as the worries over global economic slowdown did not augur well for the Indian IT industry which relies heavily on outsourcing work from US and European region. The rate sensitive counters like Banking, Automobile and high beta Real Estate once again bore the brunt of hefty selling pressure amid mounting fears of 12th interest rate hike by Indian central bank since March 2010. There remained no sectoral gainer in the space however few individual heavyweights like Jindal Steel, ONGC, Hero Moto Corp and M&M were gaining some traction.
Meanwhile, the broader markets which traded with some conviction post the robust IIP data too have slipped into the red terrain but are trading with moderate losses, outclassing their larger peers. The bourses plunged on good volumes while the market breadth on BSE was in favor of declines in the ratio of 1165:1427 while 108 scrips remained unchanged.
The BSE Sensex is currently trading at 16,829.98 down by 229.42 points or 1.34% after trading as high as 17,246.88 and as low as 16,784.56. There were 5 stocks advancing against 25 declines on the index.
The broader indices were trading on a weak note; the BSE Mid cap index slipped 0.46% and Small cap rose 0.10% respectively.
On the BSE sectoral space there were no gainers while IT down 2.62%, TECk down 2.32%, Bankex down 1.35%, Realty down 1.26%, Auto 1.12% were the major loser on the index.
Jindal Steel up 2.05%, Hero Moto up 1.55%, M&M up 0.96%, ONGC up 0.65% and Cipla up 0.24% were major gainers on the Sensex, while Tata Motors down by 5.57%, Wipro down 3.68%, TCS down 3.19%, Hindalco down 2.96% and DLF down 2.95% were the major losers on the index.
Meanwhile, the industrial growth for the month of June has allied the fear of slowdown in the industrial output. India's industrial production measured by the Index of Industrial Production (IIP) shows growth of 8.8% in June 2011 as compared to 7.4% in June 2010. This increase in growth of the IIP is due to increase in manufacturing and electricity sector which grew by 10% and 7.9% respectively, however, the mining segment of IIP saw moderation in growth, it grew by 0.6% in June 2011 from 6.9% in corresponding month of last fiscal. However, the industrial production from April to June 2011 stood at 6.8% which is less than the same period of corresponding period. This fall in growth on Q-on-Q basis is due to decline in mining and manufacturing which stood 1% and 7.5% respectively during the said period. However, electricity sector surged during the same period to 8.2%.
According to data released by the Central Statistics Office of the Ministry of Statistics and Programme Implementation, the General Index for the month of June 2011 stood at 170.3, which is 8.8% higher on year-on-year basis. The cumulative growth for the period April-June 2011-12 stands at 6.8% over the corresponding period of the previous year.
The IIP for the Mining, Manufacturing and Electricity sectors for the month of June 2011 stand at 126.0, 182.1 and 144.3 respectively, with the corresponding growth rates of 0.6%, 10.0% and 7.9% as compared to June 2010. The cumulative growth in the three sectors during April-June, 2011-12 over the corresponding period of 2010-11 have been 1.0%, 7.5% and 8.2% respectively, which moved the overall growth in the General Index to 6.8%.
During June 2011, in terms of industries 15 out of 22 industry groups in the manufacturing sector have shown positive growth in June 2011 from June 2010. The industry group 'Electrical machinery and apparatus n.e.c.' has shown the highest growth of 88.9%, followed by 19.1% in 'Office, accounting and computing machinery' and 18.6% in 'Other transport equipment'. On the other hand, the industry group 'Medical, precision and optical instruments, watches and clocks' has shown a negative growth of 10.3% followed by 10.1% in 'Radio, TV and communication equipment and apparatus'.
As per Use-based classification the growth rates in June 2011 as compared to the corresponding month of the previous year are 7.5% in Basic goods, 37.7% in Capital goods and 1.9% in Intermediate goods. The Consumer durables and Consumer non-durables have recorded growth of 1.0% and 2.1% respectively, with the overall growth in Consumer goods being 1.6%. Some of the important items of capital goods showing high growth during the current month include 'Cable, Rubber Insulated' (232.4%), 'Printing Machinery' (81.1%), 'Rubber Transmission and V Belts' (57.0%), 'Packaging Machinery' (48.5%), 'Textile Machinery' (47.9%), 'X-ray equipment' (33.1%) and 'Industrial Chains' (32.0%).
The other important items showing highly positive growth during the month are: 'Sugar' (246.9%), 'Molasses' (179.5%), 'Viscose staple fibre' (72.9%), 'Stainless/ alloy steel' (72.4%), 'GP/GC sheets' (54.1%), 'Tanned or Chrome Skins and Leathers' (53.6%), 'sponge iron' (38.0%), 'CR Sheets' (33.4%) and 'Indust. Alcohol (Rectified/Denatured Spirit)' (31.0%).
The industrial production for the month of June 2011 is higher than May 2011 and June 2010 indicating that industrial activities have increased. However, the first quarter data are not so encouraging; the April to June 2011 IIP growth stood at 6.8% as compared to 9.6% during same period of previous fiscal. Almost 3% fall in industrial production is due to elevated inflation and RBI's nonstop increase in its key policy rates. Since March 2010, RBI has increased its key policy rates by the 11 times, and it is further expected to increase it on the backdrop of recent development in international economy.
The downgrading of US government sovereign credit rating by the leading rating agency Standard and Poor's and debt crisis in European nations, are putting pressures on the capital inflow and the external trade of the government.
The S&P CNX Nifty is currently trading at 5,067.25, lower by 71.05 points or 1.38% after trading as high as 5,194.45 and as low as 5,053.35. There were 8 stocks advancing against 42 declines on the index.
The top gainers of the Nifty were Jindal Steel up 2.09%, Hero Motors up by 1.75%, Cairn up 1.12%, Power Grid up 1.07% and M&M up 0.70%.
On the other hand, Nikkei 225 declined 0.20%, Seoul Composite plunged 1.33% and Taiwan Weighted sank 1.06%.
The European markets traded on weak note as France's CAC 40 eased 0.59%, Germany's DAX shed 0.57% and London's FTSE slipped 0.23% .
Meanwhile, the broader markets which traded with some conviction post the robust IIP data too have slipped into the red terrain but are trading with moderate losses, outclassing their larger peers. The bourses plunged on good volumes while the market breadth on BSE was in favor of declines in the ratio of 1165:1427 while 108 scrips remained unchanged.
The BSE Sensex is currently trading at 16,829.98 down by 229.42 points or 1.34% after trading as high as 17,246.88 and as low as 16,784.56. There were 5 stocks advancing against 25 declines on the index.
The broader indices were trading on a weak note; the BSE Mid cap index slipped 0.46% and Small cap rose 0.10% respectively.
On the BSE sectoral space there were no gainers while IT down 2.62%, TECk down 2.32%, Bankex down 1.35%, Realty down 1.26%, Auto 1.12% were the major loser on the index.
Jindal Steel up 2.05%, Hero Moto up 1.55%, M&M up 0.96%, ONGC up 0.65% and Cipla up 0.24% were major gainers on the Sensex, while Tata Motors down by 5.57%, Wipro down 3.68%, TCS down 3.19%, Hindalco down 2.96% and DLF down 2.95% were the major losers on the index.
Meanwhile, the industrial growth for the month of June has allied the fear of slowdown in the industrial output. India's industrial production measured by the Index of Industrial Production (IIP) shows growth of 8.8% in June 2011 as compared to 7.4% in June 2010. This increase in growth of the IIP is due to increase in manufacturing and electricity sector which grew by 10% and 7.9% respectively, however, the mining segment of IIP saw moderation in growth, it grew by 0.6% in June 2011 from 6.9% in corresponding month of last fiscal. However, the industrial production from April to June 2011 stood at 6.8% which is less than the same period of corresponding period. This fall in growth on Q-on-Q basis is due to decline in mining and manufacturing which stood 1% and 7.5% respectively during the said period. However, electricity sector surged during the same period to 8.2%.
According to data released by the Central Statistics Office of the Ministry of Statistics and Programme Implementation, the General Index for the month of June 2011 stood at 170.3, which is 8.8% higher on year-on-year basis. The cumulative growth for the period April-June 2011-12 stands at 6.8% over the corresponding period of the previous year.
The IIP for the Mining, Manufacturing and Electricity sectors for the month of June 2011 stand at 126.0, 182.1 and 144.3 respectively, with the corresponding growth rates of 0.6%, 10.0% and 7.9% as compared to June 2010. The cumulative growth in the three sectors during April-June, 2011-12 over the corresponding period of 2010-11 have been 1.0%, 7.5% and 8.2% respectively, which moved the overall growth in the General Index to 6.8%.
During June 2011, in terms of industries 15 out of 22 industry groups in the manufacturing sector have shown positive growth in June 2011 from June 2010. The industry group 'Electrical machinery and apparatus n.e.c.' has shown the highest growth of 88.9%, followed by 19.1% in 'Office, accounting and computing machinery' and 18.6% in 'Other transport equipment'. On the other hand, the industry group 'Medical, precision and optical instruments, watches and clocks' has shown a negative growth of 10.3% followed by 10.1% in 'Radio, TV and communication equipment and apparatus'.
As per Use-based classification the growth rates in June 2011 as compared to the corresponding month of the previous year are 7.5% in Basic goods, 37.7% in Capital goods and 1.9% in Intermediate goods. The Consumer durables and Consumer non-durables have recorded growth of 1.0% and 2.1% respectively, with the overall growth in Consumer goods being 1.6%. Some of the important items of capital goods showing high growth during the current month include 'Cable, Rubber Insulated' (232.4%), 'Printing Machinery' (81.1%), 'Rubber Transmission and V Belts' (57.0%), 'Packaging Machinery' (48.5%), 'Textile Machinery' (47.9%), 'X-ray equipment' (33.1%) and 'Industrial Chains' (32.0%).
The other important items showing highly positive growth during the month are: 'Sugar' (246.9%), 'Molasses' (179.5%), 'Viscose staple fibre' (72.9%), 'Stainless/ alloy steel' (72.4%), 'GP/GC sheets' (54.1%), 'Tanned or Chrome Skins and Leathers' (53.6%), 'sponge iron' (38.0%), 'CR Sheets' (33.4%) and 'Indust. Alcohol (Rectified/Denatured Spirit)' (31.0%).
The industrial production for the month of June 2011 is higher than May 2011 and June 2010 indicating that industrial activities have increased. However, the first quarter data are not so encouraging; the April to June 2011 IIP growth stood at 6.8% as compared to 9.6% during same period of previous fiscal. Almost 3% fall in industrial production is due to elevated inflation and RBI's nonstop increase in its key policy rates. Since March 2010, RBI has increased its key policy rates by the 11 times, and it is further expected to increase it on the backdrop of recent development in international economy.
The downgrading of US government sovereign credit rating by the leading rating agency Standard and Poor's and debt crisis in European nations, are putting pressures on the capital inflow and the external trade of the government.
The S&P CNX Nifty is currently trading at 5,067.25, lower by 71.05 points or 1.38% after trading as high as 5,194.45 and as low as 5,053.35. There were 8 stocks advancing against 42 declines on the index.
The top gainers of the Nifty were Jindal Steel up 2.09%, Hero Motors up by 1.75%, Cairn up 1.12%, Power Grid up 1.07% and M&M up 0.70%.
Tata Motors down 5.87%, Wipro down 3.44%, TCS down 3.21%, Hindalco down 2.93% and Infosys down 2.83% were the major losers on the index.
Asian markets traded on a mixed note, Shanghai Composite advanced 0.46%, Hang Seng climbed 0.68%, Jakarta Composite rose 0.67%, KLSE Composite amassed 0.59% and Straits Times added 0.25% On the other hand, Nikkei 225 declined 0.20%, Seoul Composite plunged 1.33% and Taiwan Weighted sank 1.06%.
The European markets traded on weak note as France's CAC 40 eased 0.59%, Germany's DAX shed 0.57% and London's FTSE slipped 0.23% .
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