Sentiments in the domestic markets are continuously deteriorating session after session as lack of significant upside triggers on the domestic front and depressing developments from the global front continue to dissuade investors from Indian equities. Tuesday's session was no exception as coming from an extended weekend Indian benchmarks were expected to stage a relief rally on the back of optimistic global cues. Even though the frontline indices got off to a gap up opening, yet they failed to capitalize on the early momentum amid fears that RBI will continue its monetary tightening measures and will hike interest rates for the 12th time since March 2010. Despite the monthly WPI inflation numbers indicating slight moderation from 9.44% in June to 9.22% in July, marketmen were of the belief that external or internal conditions have not deteriorated sufficiently to force the central bank to pause its aggressive policy action. In addition, spillover effect of the domestic fuel price hike in May was evident on manufacturing as manufacturing products inflation came in at 7.49% in July from 7.43% in June. Meanwhile, the broader markets went through a brutal butchery in the session as fund based selling largely in the high beta infrastructure counter ensured that the Midcap and Smallcap indices get obliterated by around two percentage points. In the meantime, Finance Minister Pranab Mukherjee responding to the reports of easing inflationary pressures opined that inflation would ease further on back of good monsoon. On the global front, the European markets got off to a somber opening after the release of German GDP numbers for the second quarter which indicated that growth in Europe's largest economy had slowed sharply as it rose merely 0.1% in the second quarter from the first quarter and by 2.7% in annual terms. Sentiments in Europe were also undermined as investors remained reluctant to take significant new positions ahead of a meeting between French and German leaders to explore further measures that could be taken to tackle the euro zone's debt crisis and reinstate confidence in financial markets. Back home, social activist Anna Hazare and his team were arrested and prevented from going ahead with their indefinite fast demanding a "strong" Lokpal which triggered nation-wide protests with people from different walks of life demanding his immediate release and voicing support to the Gandhian's demand for a strong Lokpal.
Earlier on Dalal Street, the benchmark got off to a gap up start on the back of encouraging leads from the overnight US stock markets. But the frontline Indices failed to take advantage of the encouraging start and gradually kept losing steam. Marketmen overlooked the moderation in inflation numbers and booked hefty profits on expectations of another rate hike and also on fears of global economic slowdown, dragging the key gauges into the negative terrain in the dying hours of trade. Thereafter, the bourses failed to recover and settled way below important psychological levels. Eventually the NSE's 50-share broadly followed index Nifty, shed about three fourth of a percentage points to settle below the crucial 5,050 support level while Bombay Stock Exchange's sensitive Index, Sensex shaved off over a hundred points and ended above the psychological 16,700 mark. The broader markets, which traded without any fervor with moderate cuts in the early noon session, suffered nasty laceration by the end of session underperforming their larger peers. In the BSE sectoral space, the high beta Realty counter did the maximum damage, languishing at the bottom of the table with over five percent losses after heavyweight DLF got butchered by close to six percent on reports that Competition watchdog CCI imposed a penalty of around Rs 600 crore on realty major for abusing its dominant market position. The rate sensitive like Automobile and Bankex counters too bore hefty selling pressure and settled with around a percent loss. On the other hand, the frontline indices were limited by gains in software and technology shares which saw renewed buying interests after the recent steep declines as mergers and acquisitions reports from the US revived sentiments. The markets sank on weaker volumes of over Rs 1.26 lakh crore while the turnover for NSE F&O segment remained on the higher side compared to Friday at over 1.14 lakh crore. The market breadth too remained pessimistic as there were 849 shares on the gaining side against 1984 shares on the losing side while 107 shares remained unchanged.
Finally, the BSE Sensex lost 108.69 points or 0.65% to settle at 16,730.94, while the S&P CNX Nifty declined by 37.15 points or 0.73% to close at 5,035.80.
The BSE Sensex touched a high and a low of 17,035.49 and 16,673.52, respectively. The BSE Mid cap and Small cap indices were down by 1.79% and 2.10% respectively.
The top gainers on the Sensex were TCS up 2.40%, BHEL up by 2.30%, Bharti Airtel up by 1.73%, ITC up by 0.86% and Infosys up 0.77%.
On the flip side, Jaiprakash Associate down 7.83%, DLF down 5.92%, Hindalco Inds down 4.31%, HDFC down 3.50% and Cipla down 2.83% were the top losers on the index.
The top gainers on the BSE sectoral space were IT up 0.90%, TECk up 0.67% and FMCG up 0.23%. While, Realty down 5.38%, Metal down by 1.96%, Bankex down by 1.20%, Oil & Gas down 1.03% and Power down 1.02% were the top losers on the BSE sectoral space.
Meanwhile, India's Headline Inflation measured by Wholesale Price Index (WPI) rose to 9.22% in July, which is just below the June's 9.44%. The plunge in inflation on monthly basis is due to moderation in food inflation, fuel and power inflation, however, the manicured products segment of WPI, surged to 7.49% in July from 7.43% in June. The government also revised upward the headline inflation data for the month of May to 9.56% from 9.06%. This was the second revision of inflation data in the current financial year. In its last revision the government had increased the inflation data for the April from 8.66% to 9.74%
According to the data released by the ministry of commerce and industry, the Wholesale Price Index for 'All Commodities' (Base: 2004-05 = 100) for the month July, 2011 rose by 0.7% to 154.0 (Provisional) from 153.0 (Provisional) for the previous month. The annual rate of inflation, based on monthly WPI, stood at 9.22% (Provisional) for the month of July, 2011 (over July, 2010) as compared to 9.44% (Provisional) for the previous month and 9.98% during the corresponding month of the previous year. Build up inflation in the financial year so far was 3.01% compared to a buildup of 3.45% in the corresponding period of the previous year.
On monthly basis, the index for Primary Articles group rose by 0.2 percent to 197.9 (Provisional) from 197.5 (Provisional) for the previous month. The index for 'Food Articles' group rose by 1.4 percent to 192.8 (Provisional) from 190.1 (Provisional) for the previous month due to higher prices of coffee (15%), gram (8%), fish-inland (7%), ragi (6%), mutton (4%), fruits & vegetables (3%), barley, bajra and rice (2% each) and wheat (1%). However, the prices of condiments & spices (3%), urad, egg and arhar (2% each) and poultry chicken, masur and tea (1%) declined.
The index for 'Non-Food Articles' group declined by 3.0% to 175.8 (Provisional) from 181.3 (Provisional) for the previous month due to lower prices of raw cotton (12%), flowers (7%), raw rubber (6%), copra (4%), soyabean and mesta (3% each) and raw jute (2%). However, the prices of gaur seed (20%), niger seed (16%), linseed (11%), coir fibre (8%), sunflower (6%), gingelly seed (5%), safflower (4%), castor seed (3%) and rape & mustard seed, cotton seed, groundnut seed and raw silk (1% each) moved up.
The index for 'Minerals' group declined by 1.5% to 307.7 (Provisional) from 312.5 (Provisional) for the previous month due to lower prices of zinc concentrate (28%), limestone (7%), barytes (5%), steatite and iron ore (4% each) and sillimanite and crude petroleum (1% each). However, the prices of bauxite (7%), magnesite (5%), chromite (4%) and copper ore (3%) moved up.
The index for the Fuel and Power rose by 2.5% to 165.6 (Provisional) from 161.6 (Provisional) for the previous month due to higher prices of kerosene (13%), LPG (11%) and high speed diesel (7%). However, the prices of bitumen (6%), furnace oil (4%), naphtha and light diesel oil (3% each) and aviation turbine fuel (2%) declined.
The index for Manufactured Products rose marginally by 0.3% to 137.7 (Provisional) from 137.3 (Provisional) for the previous month. Under this major group, products such as 'Food Products, 'Beverages, Tobacco & Tobacco Products', 'Wood & Wood Products', 'Transport, Equipment & Parts products, 'Rubber & Plastic Products', and Paper & Paper Products' group, registered growth in prices for the month of June. However, products like 'Textiles' group and Machinery & Machine Tools' showed decline in prices for June.
The surge in manufacturing inflation in July is alarming. It has been above 7.4% since May 2011. Which indicated that the Reserve Bank of India (RBI) is expected to maintain its anti inflationary monetary policy stance and it is most likely to go for 12th in row on 16 September. Since March 2010 RBI has increased it key policy rates 11 times.
In the Independence Day speech Prime Minister Dr. Manmohan Singh had expressed his concern over the price scenario. Prime Minister said 'Our country is passing through a phase of sustained high inflation. Controlling rising prices is a primary responsibility of any government. By adding further Prime Minister said 'I wish to assure you today that we are continuously monitoring the situation to find out what new steps can be taken to arrest rising prices. Finding a solution to this problem will be our top-most priority in the coming months.'
The S&P CNX Nifty touched high and low of 5,132.20 and 5,015.40, respectively.
The top gainers of the Nifty were TCS up 3.15%, BHEL up 3.09%, HCL Tech up 2.27%, Bharti Airtel up 2.03% and ITC up 1.99%.
On the flip side, JP Associate down 7.66%, RCOM down 7.59%, RPower down 7.29%, Reliance Infra down 7.29% and Reliance Capital down 7.03% were the top losers on the index.
Earlier on Dalal Street, the benchmark got off to a gap up start on the back of encouraging leads from the overnight US stock markets. But the frontline Indices failed to take advantage of the encouraging start and gradually kept losing steam. Marketmen overlooked the moderation in inflation numbers and booked hefty profits on expectations of another rate hike and also on fears of global economic slowdown, dragging the key gauges into the negative terrain in the dying hours of trade. Thereafter, the bourses failed to recover and settled way below important psychological levels. Eventually the NSE's 50-share broadly followed index Nifty, shed about three fourth of a percentage points to settle below the crucial 5,050 support level while Bombay Stock Exchange's sensitive Index, Sensex shaved off over a hundred points and ended above the psychological 16,700 mark. The broader markets, which traded without any fervor with moderate cuts in the early noon session, suffered nasty laceration by the end of session underperforming their larger peers. In the BSE sectoral space, the high beta Realty counter did the maximum damage, languishing at the bottom of the table with over five percent losses after heavyweight DLF got butchered by close to six percent on reports that Competition watchdog CCI imposed a penalty of around Rs 600 crore on realty major for abusing its dominant market position. The rate sensitive like Automobile and Bankex counters too bore hefty selling pressure and settled with around a percent loss. On the other hand, the frontline indices were limited by gains in software and technology shares which saw renewed buying interests after the recent steep declines as mergers and acquisitions reports from the US revived sentiments. The markets sank on weaker volumes of over Rs 1.26 lakh crore while the turnover for NSE F&O segment remained on the higher side compared to Friday at over 1.14 lakh crore. The market breadth too remained pessimistic as there were 849 shares on the gaining side against 1984 shares on the losing side while 107 shares remained unchanged.
Finally, the BSE Sensex lost 108.69 points or 0.65% to settle at 16,730.94, while the S&P CNX Nifty declined by 37.15 points or 0.73% to close at 5,035.80.
The BSE Sensex touched a high and a low of 17,035.49 and 16,673.52, respectively. The BSE Mid cap and Small cap indices were down by 1.79% and 2.10% respectively.
The top gainers on the Sensex were TCS up 2.40%, BHEL up by 2.30%, Bharti Airtel up by 1.73%, ITC up by 0.86% and Infosys up 0.77%.
On the flip side, Jaiprakash Associate down 7.83%, DLF down 5.92%, Hindalco Inds down 4.31%, HDFC down 3.50% and Cipla down 2.83% were the top losers on the index.
The top gainers on the BSE sectoral space were IT up 0.90%, TECk up 0.67% and FMCG up 0.23%. While, Realty down 5.38%, Metal down by 1.96%, Bankex down by 1.20%, Oil & Gas down 1.03% and Power down 1.02% were the top losers on the BSE sectoral space.
Meanwhile, India's Headline Inflation measured by Wholesale Price Index (WPI) rose to 9.22% in July, which is just below the June's 9.44%. The plunge in inflation on monthly basis is due to moderation in food inflation, fuel and power inflation, however, the manicured products segment of WPI, surged to 7.49% in July from 7.43% in June. The government also revised upward the headline inflation data for the month of May to 9.56% from 9.06%. This was the second revision of inflation data in the current financial year. In its last revision the government had increased the inflation data for the April from 8.66% to 9.74%
According to the data released by the ministry of commerce and industry, the Wholesale Price Index for 'All Commodities' (Base: 2004-05 = 100) for the month July, 2011 rose by 0.7% to 154.0 (Provisional) from 153.0 (Provisional) for the previous month. The annual rate of inflation, based on monthly WPI, stood at 9.22% (Provisional) for the month of July, 2011 (over July, 2010) as compared to 9.44% (Provisional) for the previous month and 9.98% during the corresponding month of the previous year. Build up inflation in the financial year so far was 3.01% compared to a buildup of 3.45% in the corresponding period of the previous year.
On monthly basis, the index for Primary Articles group rose by 0.2 percent to 197.9 (Provisional) from 197.5 (Provisional) for the previous month. The index for 'Food Articles' group rose by 1.4 percent to 192.8 (Provisional) from 190.1 (Provisional) for the previous month due to higher prices of coffee (15%), gram (8%), fish-inland (7%), ragi (6%), mutton (4%), fruits & vegetables (3%), barley, bajra and rice (2% each) and wheat (1%). However, the prices of condiments & spices (3%), urad, egg and arhar (2% each) and poultry chicken, masur and tea (1%) declined.
The index for 'Non-Food Articles' group declined by 3.0% to 175.8 (Provisional) from 181.3 (Provisional) for the previous month due to lower prices of raw cotton (12%), flowers (7%), raw rubber (6%), copra (4%), soyabean and mesta (3% each) and raw jute (2%). However, the prices of gaur seed (20%), niger seed (16%), linseed (11%), coir fibre (8%), sunflower (6%), gingelly seed (5%), safflower (4%), castor seed (3%) and rape & mustard seed, cotton seed, groundnut seed and raw silk (1% each) moved up.
The index for 'Minerals' group declined by 1.5% to 307.7 (Provisional) from 312.5 (Provisional) for the previous month due to lower prices of zinc concentrate (28%), limestone (7%), barytes (5%), steatite and iron ore (4% each) and sillimanite and crude petroleum (1% each). However, the prices of bauxite (7%), magnesite (5%), chromite (4%) and copper ore (3%) moved up.
The index for the Fuel and Power rose by 2.5% to 165.6 (Provisional) from 161.6 (Provisional) for the previous month due to higher prices of kerosene (13%), LPG (11%) and high speed diesel (7%). However, the prices of bitumen (6%), furnace oil (4%), naphtha and light diesel oil (3% each) and aviation turbine fuel (2%) declined.
The index for Manufactured Products rose marginally by 0.3% to 137.7 (Provisional) from 137.3 (Provisional) for the previous month. Under this major group, products such as 'Food Products, 'Beverages, Tobacco & Tobacco Products', 'Wood & Wood Products', 'Transport, Equipment & Parts products, 'Rubber & Plastic Products', and Paper & Paper Products' group, registered growth in prices for the month of June. However, products like 'Textiles' group and Machinery & Machine Tools' showed decline in prices for June.
The surge in manufacturing inflation in July is alarming. It has been above 7.4% since May 2011. Which indicated that the Reserve Bank of India (RBI) is expected to maintain its anti inflationary monetary policy stance and it is most likely to go for 12th in row on 16 September. Since March 2010 RBI has increased it key policy rates 11 times.
In the Independence Day speech Prime Minister Dr. Manmohan Singh had expressed his concern over the price scenario. Prime Minister said 'Our country is passing through a phase of sustained high inflation. Controlling rising prices is a primary responsibility of any government. By adding further Prime Minister said 'I wish to assure you today that we are continuously monitoring the situation to find out what new steps can be taken to arrest rising prices. Finding a solution to this problem will be our top-most priority in the coming months.'
The S&P CNX Nifty touched high and low of 5,132.20 and 5,015.40, respectively.
The top gainers of the Nifty were TCS up 3.15%, BHEL up 3.09%, HCL Tech up 2.27%, Bharti Airtel up 2.03% and ITC up 1.99%.
On the flip side, JP Associate down 7.66%, RCOM down 7.59%, RPower down 7.29%, Reliance Infra down 7.29% and Reliance Capital down 7.03% were the top losers on the index.
The European markets were trading in red. France's CAC 40 lost 1.93%, Britain's FTSE 100 plunged by 1.08% and Germany's DAX shaved off 2.46%.
Most of the Asian equity indices reversed their initial gains and snapped the day's trade in the red on Tuesday despite impressive gains at the start of the week and a positive lead from Wall Street, inspired by takeover news and better-than-expected Japanese data after a torrid July and August. Chinese shares closed down 0.71 per cent, with banks and property developers leading the decline amid renewed worries over local government debt and Hong Kong stocks slipped 0.24 percent in the trade after the big rally of a day earlier ran out of steam. However, Japanese shares closed up 0.23 percent, lifted by a continued rally on Wall Street with sentiment brightened by Google's plan to buy cell phone maker Motorola Mobility, although worries over the impact of a strong yen capped gains. 
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