Falling GDP growth expectations move Nifty, bank steady

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The Sensex added more than 100 points just before advanced GDP data was announced, but it could not sustain the gains for long. The market turned back to the choppy movements after the government data indicated a gloomy GDP outlook.

The BSE benchmark climbed just 43 points to 17,750.40 and the NSE benchmark rose 11.5 points to 5,373.10.

Advance gross domestic product (GDP) for financial year 2011-12 came in at 6.9% as against 8.4% in the previous year, which was lower than expected. CNBC-TV18 poll saw it at 7.1%.

During the year, growth in construction, manufacturing and agriculture was lower as compared to previous year. However, mining growth was in negative due to ban in some major mines in 2011.

Index heavyweight Reliance Industries continued to support the market, gaining over 2%. Private banks like ICICI Bank and HDFC Bank climbed more than a percent while SBI rose just 0.4%.

Shares of ITC, TCS, Hero Motocorp, Tata Motors, Wipro, Hindalco and Coal India gained 0.4-1.3%.

However, HUL, Bharti Airtel and Sun Pharma tumbled 2% each; GAIL and M&M were down over 1.5%. NTPC and BHEL dropped 1%. HDFC was down 0.5%.

The market breadth was neutral and even the broader markets were flat.

In the second line shares, Puravankara Project, Central Bank of India, South Indian Bank, DB Realty and Syndicate Bank moved up 5-12%. However, Manappuram Finance tanked 12%. Zydus Wellness, India Infoline, KSK Energy Ventures and Muthoot Finance slipped 4-6%.

At 10:28 hours IST : Volatile Sensex trades higher; Reliance leads

The market continued to trade flat after hitting a six-month high by crossing the 5400 mark. It seemed to be in a consolidation mode after a rally in the previous five sessions. Banks, auto (two-wheeler) stocks, and Reliance and TCS were supporting the market while capital goods stocks, and Bharti, HDFC and ONGC limited the upside. The Sensex was up 50 points at 17,757 and the Nifty rose 14 points to 5,375.45.

Sushil Kedia, president at ATMA says that the market is clearly overbought and the RSI (relative strength index) is now making a lower high while the underlying prices continue to make a higher high. "That becomes a warning signal for this rally to gear on, lose momentum and a change in trend is anticipated to begin anytime now," he says.

He says that another 100 pts upmove is warranted, but a correction is likely within the next four-five days.

Index heavyweight Reliance Industries was quite supportive for the market, rising 1.8% as sources claimed that the company declined to withdraw arbitration against government.

Among banks, HDFC Bank and ICICI Bank gained 0.6%; SBI rose 0.3%.

Shares of ITC, TCS, Tata Motors, Jindal Steel, Hero Motocorp, Bajaj Auto, Wipro, Cipla and Coal India among other largecaps climbed 0.7-1.5%.

However, shares of Bharti Airtel and HUL fell nearly 2%. L&T and Infosys were marginally lower.

HDFC, M&M (ahead of results today), Sun Pharma, ONGC, GAIL, NTPC, BHEL and DLF slipped 0.4-1%.

Market breadth was slightly positive; about 1188 shares advanced while 951 shares declined on the BSE.