Nifty ends below 200 DMA on expiry; all sectors dip

Indian equities were slaughtered on Thursday and broke important technical levels, led by a sell-off across sectors. The indices closed the day and the January series with a sharp cut. The benchmark Nifty shut shop below the 200 daily moving average (DMA) of 5,619 and touched the four and half month low at close today.

Veteran technical chartist Louise Yamada of Louise Yamada Technical Research Advisors said the Nifty can see a pullback to 5500 if it remains below 5700. The 50-share NSE Nifty fell 83.10 points or 1.46% to 5,604.30.

The market is still jittery about a likely slowdown in the year 2011 due to further hikes expected in policy rates by the RBI to control rising inflation. RBI hiked key rates by 25 basis points on Tuesday and revised inflation to 7% versus the 5.5% it had projected in its quarterly meet on November 2.

Abhijit Chakraborty, Senior VP - Institutional Equity, Fortune Financial said, "The market is still in the process of adjusting to the fear of lower corporate earnings growth this year and the macro headwinds deterioration, whether it's inflation or current account deficit and how that could have any impact on the overall GDP growth. At the same time the RBI policy also outlines certain other macro headwinds."

"Fiscal deficit is also likely to be very high. If there is going to be a strain on the manufacturing sector and less of spending from the private sector then the overall GDP growth could also come under pressure. We are very close to the 200 DMA and if we do go below that then I think the market remains sluggish for a pretty longer period of time."

We had seen highest ever inflow of foreign money i.e. Rs 140,497.20 crore in 2010 while the January of 2011 saw a net outflow of around Rs 4,000 crore. RBI Governor D Subbarao said if western region of world improves their growth then we would see outflow of money from India, which will dampened the sentiment of markets further. Experts too agreed that emerging markets may underperform.

Jim O'Neil of Goldman Sachs said, "For 2011, specifically as a year, it might well be that the more developed markets perform better. My own personal big call for the year is that the US is going to positively surprise. If that is right, we will see US markets as they have done for the past three months, outperforming the rest of the world and certainly outperforming some of the BRIC markets, including India."

The 30-share BSE Sensex plunged 285.02 points or 1.50% to settle at 18,684.43. The broader indices too followed the same trend; the BSE Midcap Index was down 1.9% and Smallcap down 1.35%.

In January series, the Sensex and Nifty plummeted 8% each.

All sectoral indices closed in red. The BSE Realty Index was the most beaten down sector as likely slowdown in economy will hurt realty companies' sales; fell 3.57%. Healthcare, Metal and Bank indices were down 1.85-2.6%. Oil & Gas, Capital Goods, Auto, Power, IT and FMCG declined 1-1.6%.

Heavyweights Reliance Industries and ONGC were down 1.5-1.65%. Telecom players like Bharti Airtel and Reliance Communications tanked 3.6-3.9%. Infosys and Wipro from technology pack slipped 1.9% each while TCS rose 0.9%.

Sterlite Industries was the second top loser on Nifty with 5.4% fall due to Balco arbitration matter. The arbitrator says that Sterlite cannot buy the balance 49% stake in Balco. This arbitrator award would impact residual stake sale in Hindustan Zinc as well. BALCO arbitration award was given on Tuesday and 3-judge arbitration panel gave award. Govt's 49% stake in BALCO was valued at Rs 1,200 crore in 2004; Sterlite holds 51% stake in BALCO.

Jindal Steel, Tata Steel, Hindalco and SAIL declined 0.9-2.2% while Sesa Goa went up 1.4%. Ambuja Cements and ACC outperformed others with gain of 2% each.

BHEL and L&T from capital goods space went down 2.5% & 1.3%, respectively. Tata Power and Suzlon Energy lost 1.7-2.9% whereas Power Grid and Reliance Power were up 0.4-1.2%.

India's second largest bank ICICI Bank' shares lost 2.3% followed by SBI, HDFC Bank, Kotak Mahindra Bank, PNB and IDFC fell 0.9-3%. DLF from realty pack tumbled 5.7%.

M&M from auto space plunged 4.6%; Hero Honda, Maruti and Bajaj Auto were down 0.6-2.85% while Tata Motors rallied 2.6% - a top gainer on Nifty after brokerages upgraded the stock. HUL lost another 4% on disappointing results.

Sun Pharma, Ranbaxy, Cipla and Dr Reddy's Labs from healthcare segment fell 1.5-4%.

In midcap space, Atlas Copco rallied 13.92% to Rs 2,129.65 as company revised delisting floor price to Rs 2250/share.

Sterling International, IBN18 Broadcast (on strong numbers - reported net profit of Rs 20 crore in Q3 as against loss of Rs 13 crore in previous quarter), Money Matters and Network 18 (on strong numbers) were up 5-6%.

However, Jyothy Labs, Sanwaria Agro, Blue Star, Deccan Chronicle and SpiceJet fell 7.4-11.6%.

In smallcap space, PI Industries surged 15.06%. KPR Mill, Balkrishna Inds, Prime Securities and Atco Corp gained 5.6-6% while Talwalkars Fitness, SREI Infra, Splash Media, Aqua Logistics and A.K.Capital lost 8.7-13%.

About 950 shares advanced as against 1910 shares declined on Bombay Stock Exchange.

Total traded turnover was higher than normal trading day due to expiry day. Exchanges reported total turnover of Rs 2,31,072.38 crore. This included Rs 16,433.91 crore from NSE cash segment, Rs 2,11,338.88 crore from NSE F&O and the rest of Rs 3,299.59 crore from BSE cash segment.

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Nifty tests 5600; all sectoral indices in red

The benchmark Nifty broke the 200 daily moving average level (DMA) as well as slipped below the 5600-mark on the back of sell-off in across sectors at 15 hours IST.  Realty, Healthcare, Bank, Metal and Oil & Gas indices were down 2-3% followed by IT, Auto, Capital Goods, Power and FMCG indices with fall of one percent.

The 30-share BSE Sensex was trading at 18,668.68, down 300.77 points and the 50-share NSE Nifty fell 88.65 points to 5,599.15. The broader indices too tanked 1.5-2%.

Among frontliners, DLF, Sterlite Industries, M&M, HUL, Bharti Airtel and Reliance Communications tanked 3.5-6%.

However, Tata Motors, ACC and Ambuja Cements went up 2.5-2.7%. TCS and Sesa Goa gained 1.3-1.7%.

In midcap space, Atlas Copco rallied 13.61%. IBN18 Broadcast, eClerx Services, Sterling International and Money Matters jumped 5-8.5%.

However, Jyothy Labs, Sanwaria Agro, Blue Star, Core Projects and Deccan Chronicle fell 7-11.6%.

In smallcap space, PI Industries, Timex Group, Ratnamani Metal, KPR Mill and Tata Coffee were up 6-11%.

However, Talwalkars Fitness, SREI Infra, Splash Media, Nilkamal and Ion Exchange lost 8-13%.

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Nifty tests 5650; realty, pharma, metals, IT, oil & gas dip

At 13:29 hours IST - Indian equities continued the sell-off for second consecutive day in a choppy trade. The benchmark Nifty has tested 5650 level in afternoon trade. Oil & gas, realty and metal companies' shares were adding fuel to fire. Bharti, Infosys, BHEL, Wipro, M&M, HUL, HDFC and ICICI Bank too were adding pressure on benchmarks.

Veteran technical chartist Louise Yamada of Louise Yamada Technical Research Advisors said Nifty can see a pullback to 5500 if it remains below 5700. Meanwhile, she sees short-term support for Sensex at 19,000.