WILD SWINGS

It turned out to be a rollercoaster ride for the frontline indices which showed wild swings in the dying hours of trade not only to eventually quintuple the sorrow of closing in the negative terrain but also to sink below the levels last seen 28-months ago on August 21, 2009. The session was characterized by high amount of volatility as the indices tried hard to claw beyond the previous closing levels but it seemed like the bears had the last say as they stalled the resurgence of the benchmarks twice in the session and took profits off the table. The frontline gauges crashed suddenly in the last half hour of trade thanks to the relentless selling pressure in heavyweights including Reliance and Larsen & Toubro. The benchmarks' gradually crawled below the psychological 4,550 (Nifty) and 15,200 (Sensex) levels by the end of trade and deposed around one and half a percentage points making the negative close look shoddier because of the fact that major stock markets across Asia and Europe exhibited positive trends amid the tentative improvement in investors' risk appetite. Jittery investors lacked conviction to build positions as worries over the outlook of markets intensified amid the gloomy domestic macro-economic headwinds and also amid heightened uncertainty over Europe's future.  Sentiments largely remained pessimistic in the domestic markets as concerns over widening fiscal deficit, swelling current account gap, high borrowing cost, depreciating rupee, slowing economy and lack of policy initiatives kept investors away from risky asset classes like equities. Worries from the European front too played their share of spoilsport as reports of ECB President's remarks that the European economic outlook faced substantial downside risks, intensified doubts about a solution to Europe's debt woes. Meanwhile, investors also overlooked the encouraging reports from US, which suggested that the world's largest economy is likely to expand between 2 percent to 2.5 percent next year.
Earlier on Dalal Street, the benchmark got off to an optimistic opening following supportive leads from Asian markets as sentiments in the region got buttressed on hopes that the US economy will pick up pace and grow by around 2% to 2.5% next year. However, the optimism fizzled out sooner than later as the indices dipped into the red terrain and traded in a narrow range through the morning trades. The indices showed sharp moves in the afternoon trades as they slipped to lower levels only to bounce back into the green terrain for a brief period. But the key gauges suddenly witnessed a devastating U-turn in the last 30 minutes, as hefty position squaring across the board ruthlessly dragged key indices to fresh 28-month lows. The NSE's 50-share broadly followed index - Nifty plunged by over a percent to settle below the crucial 4,550 support level while Bombay Stock Exchange's Sensitive Index - Sensex took a two hundred point cut and closed below the psychological 15,200 mark. Moreover, the broader markets too finished on a daunting note with around one and half a percent losses, underperforming their larger peers. On the BSE sectoral front, the badly beaten down Capital Goods space continued to bear the brunt of hefty position squaring and plummeted by three and half a percent followed by the metal index which too sank with similar losses. The rate sensitive counters too remained on the sellers' radar with Realty and Auto indices settling with about two and half a percent cuts. On the other hand, only the defensive FMCG pocket managed to hold its head above the water by the end with moderate gains. The markets slipped on weaker volumes of over Rs 1.50 lakh crore while the turnover for NSE F&O segment too remained on the lower side as compared to Monday at over 1.35 lakh crore. The market breadth was awfully pessimistic as there were 862 shares on the gaining side against 1,877 shares on the losing side while 116 shares remained unchanged.
Finally, the BSE Sensex shaved off 204.26 points or 1.33% to settle at 15,175.08, while the S&P CNX Nifty sank by 68.90 points or 1.49% to close 4,544.20.
The BSE Sensex touched a high and a low of 15,448.13 and 15,135.86 respectively. The BSE Mid cap and Small cap index were down by 1.86% and 1.45% respectively.
The major gainers on the Sensex were ONGC up 2.39%, HDFC Bank up 1.98%, ITC up 1.11%, HDFC up 0.69% and HUL up 0.169%. While, JP Associates down 7.26%, Tata Steel down 5.27%, Tata Power down 5.23%, Hero Moto down 5.16% and L&T down 5.14% were the major losers on the index.
On the BSE sectoral space, FMCG up 0.37% was the only gainers while Capital Goods (CG) down 3.50%, Metal down 3.48%, Realty down 2.71%, Power down 2.59% and Auto down 2.44% were the major losers on the BSE sectoral space.

Meanwhile, Indian Pharmaceutical exporters are facing tough competition especially in Bulk drugs sector in international markets from China said Minister of State (MoS) for Commerce and Industry, Jyotiraditya Scindia in a written reply in Lok Sabha. According to the UN Comtrade data, Indian exporters exported $1034.04 million worth of Bulk drugs in the year 2010 against China's $6040.26 million in the same period. While the Brazil remained a distant third in the Bulk drug exports with $82.27 million worth of exports in 2010.

Further, Indian exporters exported $6093.22 million worth of Formulations in the year 2010 being the leading exporter in the sector among the BRIC nations which includes Brazil, Russia, China and itself. However, China's Formulations exports continued to rise at a brisk pace as it grew by over 31% to $4461.17 million in 2010 from $3397.26 million in 2009. Meanwhile, India is also facing competition from Brazilian companies in Latin American Countries.
Jyotiraditya Scindia also said that government has prepared strategies to achieve an export target of $25 billion in pharma sector by 2013-14 despite facing a stiff competition from China and Brazil. All three countries -- India, China and Brazil -- are members of the four-nation bloc of emerging economies called BRIC with R standing for Russia.
The minister of state also said that as per extant FDI policy, FDI, up to 100% under the automatic route, is permitted for Greenfield investments in the pharmaceuticals sector, while FDI, up to 100%, is permitted for brown field investments (i.e. investments in existing companies), in the pharmaceuticals sector, under the Government approval route.
The S&P CNX Nifty touched a high and low of 4,637.25 and 4,531.15, respectively.
The top gainers on the Nifty were Ranbaxy up 3.24%, ONGC up 2.45%, HDFC Bank up 2.22%, ITC up 1.27% and SAIL up 0.91%. On the flip side, JP Associates down 8.15%, Hero Moto down 6.05%, L&T down 6.03%, Tata Power down 5.90% and Tata Steel down 5.72% were the top losers on the index.
The European markets were trading on a mixed note. France's CAC 40 up 1.03%, Britain's FTSE 100 down by 0.11%, and Germany's DAX was up by 1.03%.
Most of the Asian equity indices edged higher on Tuesday, winning back some of Monday's losses as fears aroused in the wake of North Korean leader Kim Jong-il death subsided, although European woes continued to cast a pall. With attention turning to the leadership succession in Pyongyang, markets were relieved that there seemed to be no internal turmoil in the nuclear-armed state, providing dealers an opportunity for bargain hunting. Meanwhile, China's main stock index closed marginally lower by 0.1 percent, trading narrowly on Tuesday as investors remained cautious while, Japan's Nikkei average gained about half a percent as short-term players bought back shares that had been sold.