Equity markets in India continue to sway on the tune of crude oil prices, which have been on a roller-coaster ride off late, as sentiments got undermined by the prolonged fighting in Libya which stoked supply concerns. Discouraging leads from the Asian and European markets too proved as a big dampener for the domestic bourses as rising crude oil prices was the biggest concern for the investors at large since higher crude prices mean worsening current account deficit for the importing economies. However, the downside remained capped for the frontline indices as the week on week drop in inflation numbers released by the government along with the ease in crude prices in the late hours provided some support. In addition India's export figures too remained encouraging as it swelled by 50% to $23.6 bn in the month of February. The NSE's 50-share broadly followed index, Nifty slipped over half a percent to end a tad below the crucial 5,500 support level while the Bombay Stock Exchange's Sensitive Index, or Sensex shed about one hundred fifty points to settle around the 18,300 mark. The broader markets too snapped the day in the negative territory but managed to outperform the larger peers as the BSE's midcap index went home with marginal losses of 0.07% while the smallcap index fell by 0.25%. On the BSE sectoral front, the metals counter witnessed hefty position squaring as they sulked 1.30% after heavyweights like Jindal Steel and Tata Steel plunged over 2.50% each. The rate sensitive Bankex pocket declined 1.16% on worries that rising prices might lead the Reserve Bank of India to further hike interest rates at least 25bps in its monetary policy review on March 17, 2011. Banking bellwethers like ICICI Bank and SBI drifted by 1.87% and 1.63% respectively. On the other hand, the high beta realty pack managed to hold on to some gains today and settled higher by 0.67% after majors like Unitech and DLF respectively gained 1.47% and 1.42% respectively on the BSE.
On the global front, all Asian equity indices settled in the red zone as increasing unrest in Libya and China's unexpected trade deficit for February sparked a selloff in the region. Chinese benchmark, Shanghai Composite remained the top loser in the space and went home after plummeting almost one and half a percentage point. The European markets too mirrored similar trends with FTSE 100 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 on a pessimistic note.
Earlier on Dalal Street, the benchmark got off to a negative start given that the cues from Asian markets and overnight US markets remained somber as investors at large felt the heat of boiling crude oil prices amid the prolonged civil upheaval in Libya and fears of the domino effect spreading to larger oil producing countries like Saudi Arabia and other neighboring nations. The bourses after the weak opening slipped to even lower levels within the first hour of trade. Thereafter the index moved in a narrow range for rest of the day and treaded only sideways. The benchmarks touched their intraday high levels in second half but got dragged to lower levels on reports that troops loyal to Libyan leader Muammar Gaddafi launched yet another bombardment near oil facilities in Ras Lanuf. Eventually the indices settled with over half a percent loss as they pared some part of losses after investors covered some short positions as they tracked the marginal wilt in crude oil prices in the dying hours of trade. Volumes for the markets remained on weaker side at around Rs 0.98 lakh crore while the turnover for NSE F&O segment too was abysmal at over Rs 0.68 lakh crore. Market breadth remained negative as there were 1273 shares on the gaining side against 1549 shares on the losing side while 128 shares remained unchanged.
Finally, the BSE Sensex declined 141.97 points or 0.77% to settle at 18327.98 while the S&P CNX Nifty declined 36.60 points or 0.66% to end at 5494.40.
The BSE Sensex touched a high and a low of 18430.84 and 18261.26, respectively. The BSE Mid-cap and Small-cap indices gained 0.07% and 0.25%, respectively.
ONGC up 1.62%, DLF up 1.42%, Wipro up 0.69%, Reliance Infrastructure up 0.66% and Reliance Communication up 0.45% were the major gainers on the Sensex.
On the flip side, Tata Power down 2.91%, Tata Steel down 2.59%, ICICI Bank down 1.87%, Hindalco Industries down 1.72% and SBI down 1.63% were the major losers on the index.
Cadila Healthcare's joint venture partner Hospira won approval from USFDA for generic version of Sanofi-Aventis' cancer drug Taxotere. Generic Taxotere, or docetaxel, is a single-vial formulation as opposed to the two-step process for the branded Taxotere.
Taxotere, which is approved to treat breast, lung, and other types of cancer, had U.S. sales of about $1.2 billion in 2010. It lost patent protection in November, opening the market up to generic competitors.Cadila Healthcare (CHL) operates in areas of active pharmaceutical ingredients (API) to formulations, and animal health products to cosmeceuticals.
The main losers in the BSE sectoral space were Metal down 1.30%, Bankex down 1.16%, TECk down 0.54%, IT down 0.53% and Consumer durables (CD) down 0.53%.
Realty up 0.67% was the only gainer in the BSE sectoral space.
Food inflation in India has declined for the second successive week in late-February, after the marginal rise seen in the week-ended Feb 12. This will provide the much needed comfort to the Reserve Bank of India (RBI) which has been accused to be 'behind the curve' in fighting inflation. The central bank is widely expected to hike the policy rates by at least 25 basis points in its policy mid-quarterly policy review on March 17. The RBI has hiked key policy interest rates seven times since last March in its bid to control inflation.
According to the data released by the ministry of commerce and industry on Thursday, food price index rose by single digits to 9.52% for the week ended February 26, 2011 as compared to 10.39% seen in the previous week. The decline was largely on the back of ease in prices of vegetables, potatoes and rice.
The inflation for primary articles for the week ended February 26, 2011 came at 13.96% as compared to 14.85% seen in the previous week. The Fuel group inflation for the week ended February 26, 2011 stood 9.48% as compared to 12.56% seen in previous week. Though the fuel inflation growth eased to some extent but it still remains at elevated levels as the risk of rising energy prices due to the prolonged civil upheaval in the Middle East and North African nations poses a challenge to policymakers' inflation management strategy as costlier fuel runs the risk of underpinning overall inflation.
The wholesale price index, the most widely watched gauge of prices in India, advanced by 8.23% in January from a year earlier, against 8.43% in December.
The S&P CNX Nifty touched a high and a low of 5,516.30 and 5,468.45, respectively.
The top gainers on the Nifty were Reliance Capital up 4.51%, ONGC up 2.51%, Suzlon up 1.68%, DLF up 1.62% and SAIL up 1.42%.
The top losers on the index were Tata Power down 2.74%, Tata Steel down 2.68%, Sesa Goa down 2.30%, Dr. Reddy down 2.07% and ICICI Bank down 2.05%.
India's leading telecommunications company, Bharti Airtel has added about 6 lakh 3G subscribers, which offer higher average revenues, since the launch of the next generation telephony service in January-end. 3G offers better bandwidth that allows heavy data transfer. Mobile firms have paid heavy fees in an auction to secure the spectrum for rollout of the services.
Recently, the company had unveiled its 3G services in Mumbai. It is the 11th city where Airtel launched its services and the company is targeting a rollout in 40 cities across 13 telecom circles where it has secured a 3G license by March-end. For the Mumbai circle, the company has invested in erecting 1,300 3G sites or towers which are over and above 3,100 2G sites it has
European markets were trading mixed on Thursday. France's CAC 40 declined 0.60%, Germany's DAX rose 0.91% and Britain's FTSE 100 declined by 1.00%.
All the Asian equity indices finished the day's trade in the negative terrain on Thursday as increasing unrest in Libya and China's unexpected trade deficit for February sparked a selloff in the region. Chinese Shanghai Composite crumbled about one and a half percent after the country posted a $7.3 billion trade deficit in February, compared with expectations of a surplus, as exports and imports growth slowed sharply, bearing the impact from the Chinese New Year holidays during the month. Moody's downgrade of Spain's government-bond ratings by one notch to Aa2 also weighed the sentiments in the region.
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