GLOBAL PRESSURE

Stock markets in India continue to stagger under the tremendous global pressure as one discouraging event after another popped up in the day's trade. The benchmarks settled after taking a blow of around a percentage point and local investors displayed a knee jerk reaction to the disquieting developments in Japan which was hit by a great earthquake of 8.9 magnitude on Richter scale, fifth largest recorded worldwide. The greater concern was the over 10 meter high Tsunami waves which was triggered by the quake in the Northern parts of Japan, as Tsunamis can travel up to 450 miles per hour destroying come what may in its way. However, optimists remained of the believe that the earthquake in Northern Japan could be a blessing in disguise for the Indian markets given the fact that crude oil prices cooled a large extent from the recent highs while reports that fears of unrest in Saudi Arabia is subsiding too undermined the spiraling crude oil prices. Meanwhile, reports of smart recovery in industrial production index (IIP) for the month of January too got shrugged as investors chose to take profits off the table amid the growing uncertainties across the fragile global setup. The NSE's 50-share broadly followed index, Nifty slipped by a percent point to end a tad below crucial the 5,450 support level while the Bombay Stock Exchange's Sensitive Index, or Sensex shed around one hundred fifty points to settle below the 18,200 mark. The broader markets too snapped the day in the negative territory and ended underperforming the larger peers as the BSE's midcap index went home with losses of 1.07% while the smallcap index fell by 1.12%. On the BSE sectoral front, the metals counter languished at the bottom of the table for the second straight day on hefty position squaring and sulked 1.91% after heavyweights like Jindal Steel and Sterlite Industries plunged 3.94% and 3.06% respectively. The technology pocket declined 1.61% as IT bellwethers like TCS and Infosys drifted by 2.89% and 1.07% respectively. On the other hand, the high Oil Gas pack managed to hold on to some gains today and settled up by 0.81% after heavyweight ONGC soared by 2.14% as crude oil prices receded to lower levels in today's trade. Two IPOs had strong listing on the bourses this Friday viz; Textile manufacturer Sudar Garments which jumped 48% against the issue price of Rs 77 per share and Fineotex Chemicals more than doubled in the first day of listing against the issue price of Rs 70.

On the global front, all Asian equity indices settled in the red zone after a massive 8.9 magnitude quake hit northeast Japan, causing a 10 meter tsunami along parts of the country's coastline. Japanese Nikkei average closed with a cut of 1.7 percent hitting a 5-week low. The European markets too are mirroring similar trends with CAC 40 shrinking around a percent, being the top laggard. On the other hand, the screen trading for US index futures also indicated that the Dow could open with around half a percent cut.

Earlier on Dalal Street, the benchmark got off to a gap down start as sentiments got pummeled by daunting close from the overnight US markets while the weaker-than-forecasted Japanese GDP numbers weighed on the regional peers. The frontline indices recovered from early morning's losses after the data released by government showed that industrial production grew by 3.7 per cent in January as against an upwardly revised rate of 2.5% in December. However, the indices crumbled deep in to the red as panic selling took center stage after news of a major earthquake in Japan and failed to regain the lost ground. Eventually markets staged a partial recovery on the back of buying in the oil sector after tumbling over 200 points in the early afternoon session. Volumes for the markets remained on higher side as compared to Thursday at around Rs 1.35 lakh crore while the turnover for NSE F&O segment too was high at over Rs 1.18 lakh crore. Market breadth remained negative as there were 924 shares on the gaining side against 1928 shares on the losing side while 118 shares remained unchanged.

On Charts: The S&P CNX Nifty today closed below 5460 level which was very crucial on weekly chart. The index may face strong support around 5,402 levels if it breaks that, next levels will be around 5,360 mark. On the other hand, resistance will be around 5,460 and 5,540 mark.

Finally, the BSE Sensex declined 153.89 points or 0.84% to settle at 18174.09 while the S&P CNX Nifty declined 48.95 points or 0.89% to end at 5445.45.

The BSE Sensex touched a high and a low of 18,368.43 and 18,063.29, respectively. The BSE Mid-cap and Small-cap indices declined 1.07% and 1.12%, respectively.

ONGC up 2.14%, RIL up 0.73%, Tata Power up 0.55%, Hindustan Unilever up 0.42% and ITC up 0.15% were the major gainers on the Sensex.

On the flip side, BHEL down 3.64%, Reliance Communication down 3.46%, Reliance Infra down 3.19%, Sterlite Industries down 3.06% and Jaiprakash Associates down 2.90% were the major losers on the index.

The Index for Industrial Production (IIP) has shown smart recovery in the month of January, coming at better than expected 3.7% after hitting a 20-month low of 1.6% in December. Higher exports, Consumer Goods sector growth has helped the ramp up in the numbers. However, December growth has been revised to 2.5%.

As far as internals are concerned the best performers were, Consumer Goods surging to 11.3% from 0.40% (Y-o-Y), Consumer Non Durables returned to positive 6.9% from -7% in the last year, Electricity grew by 10.5% from 5.6%, all other sectors showed decline in the January 2011 compared to same month last year, Capital Goods sector showed the biggest wilt, contracting to -18.6% from 57.9%, Manufacturing declined to 3.3% from 17.9%, Mining declined to 1.6% from 15.9%, Consumer Durables declined to 23.3% from 28.2%, Basic Goods declined to 7.6% to 11.5% while Intermediate Goods declined to 7.9% from 22.2%

The high base effect has negated the growth, as the last January growth was a solid 16.8%. However the other factor is the worsening of the macroeconomic situation. Continuous surge in the crude prices is also threatening to pause the growth cycle and companies are worried about rising cost of funds and input costs.

The main losers in the BSE sectoral space were Metal down 1.91%, TECk down 1.61%, IT down 1.49%, Power down 1.49% and Capital Goods (CG) down 1.42%.

Oil &Gas up 0.81% and FMCG up 0.03% were the only gainers in the BSE sectoral space.

Electrical components maker Havells India is looking to expand its footprint in the domestic and overseas markets. The company is eyeing newer markets like Eastern Europe, Middle East, Africa and Asia and is planning to take the Sylvania brand to newer markets in 2011.

Further, the company, which has been selling ceiling fans, has launched its water heater in October and is now researching other home appliances it can introduce using its existing distribution network. The company has reported a net profit of Rs 61.12 crore for the quarter ended December 31, 2010 as compared to Rs 58.93 crore for the quarter ended December 31, 2009, up 3.72%. Its total income has increased by 23.10% to Rs 728.01 crore for the quarter ended December 31, 2010 from Rs 591.40 crore for the quarter ended December 31, 2009.

The S&P CNX Nifty touched a high and a low of 5,502.70 and 5,411.55, respectively.

The top gainers on the Nifty were Ranbaxy up 2.26%, ONGC up 1.97%, BPCL up 0.87%, Reliance Industries up 0.85% and Sunpharma up 0.78%.

The top losers on the index were BHEL down 3.90%, RCOM down 3.66%, Reliance Infra down 3.59%, Ambuja Cement down 3.12% and Sterlite Industries down 3.06%.

Indian IT services provider --Tech Mahindra-- has opened a new development centre in Germany to provide service to its client in Germany and Central Europe. The company derives 54 percent of its revenue from Europe with Germany ranking second within the continent after the United Kingdom.

Tech Mahindra is a part of the $7.1 billion Mahindra Group, and offers Information Technology (IT) services and solution to telecommunications sector across the world. Its client list includes big companies like British Telecom (BT), AT&T, Motorola and Alcatel-Lucent are among others.

Mahindra group is in process of partnering with the US telecom equipment maker Cisco Systems to provide a range of services including cloud computing.

Tech Mahindra has reported a rise of 21.85% in net profit after tax to Rs 202.02 crore for the quarter ended December 31, 2010 against Rs 165.80 crore for the quarter ended December 31, 2009. Total income for the quarter stood at Rs 1,233.90 crore, up 6.76% over Rs 1,155.77 crore for the year ago period.

European markets were trading red on Friday. France's CAC 40 declined 1.04%, Germany's DAX rose 1.16% and Britain's FTSE 100 declined by 0.75%.

All the Asian counterparts finished the day's trade in the negative terrain on the last trading day of the week after a massive 8.9 magnitude quake hit northeast Japan, causing a 10 meter tsunami along parts of the country's coastline. Japanese Nikkei average closed with a cut of 1.7 percent hitting a 5-week low. In addition, ongoing worries about unrest in Libya and reports of police firing on protesters in Saudi Arabia revived fears of further unrest in the world's top oil exporter. The euro too fell after a downgrade of Spain's credit rating by Moody's weighing down the sentiments.