Tuesday, December 27, 2011

LACK LUSTER PERFORMANCE

Indian equities continued its lackadaisical trade below neutral line in the late afternoon session in absence of buying due to lack of any positive upside trigger. High volatility is expected on the bourses this week as traders are expected to roll over positions in the futures & options (F&O) segment from the near-month December, 2011, series to January, 2012, series. Investors at large lacked conviction to take big bets ahead of the year end as they concentrated on Euro-zone sovereign debt trouble and cooling global growth. Market participants looked ahead for the European and the US markets for direction ahead of some US economic reports, including the S&P Case-Shiller house price index for October and consumer confidence for December. Traders were seen piling up position in Capital Goods and FMCG sector while selling was witnessed in Realty, Bankex and PSU sector.
Axis Bank, Kotak Bank, SBI, HDFC Bank, ICICI Bank and PNB from Banking counters were seen trading in red pulling the markets down. Industry heavyweights RIL is seen trading in red with a cut off around more than half percent helping markets bleed. DLF from realty sector was down with cut of around more than two and half percent exerting pressure on the markets. On the global front, all Asian markets traded largely on pessimistic mood barring Shanghai Composite while the European markets were trading in green on optimistic note. Back home, the NSE Nifty and BSE Sensex were trading above their psychological 4,750 and 15,900 levels, respectively. The market breadth on BSE was in favor of declines in the ratio of 1134:1360 while 132 scrips remained unchanged.
The BSE Sensex is currently trading at 15,902.72 down by 68.03 points or 0.43% after trading as high as 16,049.12 and as low as 15,885.63. There were 7 stocks advancing against 23 declines on the index.
The broader indices were trading on a negative note; the BSE Mid cap index was down 0.49% while Small cap dropped 0.21%.
On the BSE sectoral space, Capital Goods up 0.24% and FMCG up 0.12% were the only gainers while Realty down 1.50%, Bankex down 1.13%, PSU down 1.06%, Metal down 0.88% and Power down 0.86% were the top losers in the space.
Bajaj Auto up 0.97%, M&M up 0.94%, L&T up 0.76%, Jindal Steel up 0.61% and Wipro up 0.28% were the major gainers on the Sensex, while DLF down 2.57%, Cipla down 2.40%, Coal India down 2.18%, Tata Motors down 2.09% and JP Associates down 1.90% were the major losers in the index.
Meanwhile, giving enough scope for the government to lift a ban on exports of wheat and non-basmati rice and introduce the Food Security Bill in Parliament, the agriculture sector performed exceptionally well in 2011, with record food grains production of over 240 million tonnes. Farmers' very old demand for crop loans at a 4% rate of interest was met during the year, although with a rider that the facility would be available to only those farmers that pay their crop loans on time.
The major highlights of the year was sharp rise in the farm credit target by Rs 1,00,000 crore to Rs 4,75,000 crore and the launch of new schemes with a total outlay of Rs 1,500 crore to raise production of nutri-cereals, fodder, palm oil, vegetables and protein supplements.
Further, helped by timely and abundant rains last year, the agriculture sector rebounded with a record harvest of 241.56 million tonnes of food grains in the 2010-11 crop year, with production of wheat, pulses and coarse cereals touching an all-time high. In the 2009-10 crop year (July-June), food grains production fell by 16 million tonnes to 218 million tonnes due to a severe drought in 2009.
Remarkable performance was seen in pulses and oilseeds production, on which the government has focused its efforts to make India self-sufficient and reduce dependence on imports. India produced 18.09 million tonnes of pulses and 31.1 million tonnes of oilseeds during the year, an all-time high for both these essential items, also had a positive impact on imports, which declined by 6% in the case of vegetable oils, while inward shipments of pulses fell by over 20%.
Sugarcane output also improved and as a result, sugar production exceeded domestic output after two years. The country turned exporter of the sweetener this year, from a net importer in 2010. The bumper farm production was reflected in the growth numbers. The agriculture sector grew by a healthy 6.6% in the 2010-11 financial year compared to 0.4% in the previous year.
Record food grains production, together with abundant stocks in FCI godowns, prompted the government to allow exports of wheat and non-basmati rice under Open General Licences (OGL) in September this year after a long gap. Though wheat exports were banned in early 2007, overseas rice shipments were restricted in April, 2008, as part of the Centre's measures to curb high inflation, which has been hovering above the comfort zone.
The S&P CNX Nifty is currently trading at 4,753.20, lower by 25.80 points or 0.54% after trading as high as 4,800.50 and as low as 4,750.85. There were 17 stocks advancing against 33 declines on the index.
The top gainers on the Nifty were RCOM up 3.09%, Ambuja Cement up 1.84%, Ranbaxy up 1.52%, Bajaj Auto up 1.25% and Reliance Infra up 1.21%.
Axis Bank down 3.04%, IDFC down 2.90%, Power Grid down 2.78%, DLF down 2.54% and Coal India down 2.45% were the major losers on the index.
Asian markets traded on a negative note; Jakarta Composite declined 0.86%, Nikkei 225 slipped 0.46%, Straits Times eased by 0.17%, Seoul Composite dropped by 0.79% and Taiwan Weighted dipped by 0.11%. On the flip side, Shanghai Composite inched up 0.05%.
Stock market in Hong Kong remained closed on Tuesday for a public holiday.
The European markets were trading in green, France's CAC 40 added 0.48%, Germany's DAX jumped 0.38% and Britain's FTSE 100 gained 1.02%

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