Sensex slides on weak global cues

Major headlines

Tulsi Extrusions’ board approved stock split; the stock closed lower by 0.91%

DQ Entertainment International signed European footwear licensing pact; the stock ended 1.41% higher

Econet Group deployed Subex’s fraud management solution; the stock closed 0.27% higher



Global signals

European shares fell to their lowest level in a month today, tracking a decline on Wall Street, with commodity producers suffering on worries about the strength of the economic recovery.

All the major Asian indices closed in the negative territory today, except the Shanghai Composite. Japan's Nikkei hit a 15-month low to breach the 9000 level.

The US stock index futures point to a lower opening on the Wall Street today. Investors may keep an eye on the data for existing home sales for July 2010.

The companies expected to report earnings today include Medtronic Inc and Big Lots Inc.

Indian indices

The domestic indices had a poor session of trade today and ended the day with significant losses on the back of profit booking and weak global cues. However, the benchmark Nifty managed to hold the 5500 level and closed above it.. The Sensex shed almost 100 points, led by selling in metal, capital goods, technology, auto, realty and oil marketing and power companies' shares. Index heavyweights Reliance Industries, Oil & Natural Gas Corporation (ONGC) and ICICI Bank contributed towards the decline in the bellwether indices. However, Cairn India, Bharti Airtel, State Bank of India, HDFC Bank, Reliance Communications, Hindustan Unilever, ITC and Ranbaxy Labs posted significant gains, which capped losses.

Sterlite Industries, Sesa Goa and Hindustan Zinc declined after the environment ministry rejected Vedanta Resources' plan for bauxite mining in Orissa. Vedanta Resources has a controlling stake in Sterlite Industries, Sesa Goa and Hindustan Zinc.

Owing to weak global cues, the Sensex started the session lower although by merely 2 points (over the previous closing) at 18407. The index soon turned in to green for a brief period to hit the day’s high of 18452 before slipping back in the negative territory. The Sensex continued to trade in negative territory through out the morning session. The index extended its losses as the session progressed. The 30 share index fell further in the afternoon session as European stocks opened lower. In the mid afternoon session the Sensex hit the day’s low of 18261 as selling intensified in realty and metal stocks. Finally, the index managed to end the session above 18300 levels.

At the closing bell, the Sensex closed at 18311, 98 points lower than yesterday’s closing. The Nifty shut at 5505, down by 38 points.

Bond market update: India’s 10-year bonds fell for a sixth straight day, headed for the longest losing streak since February, ahead of a sale of Rs200 billion ($4.2 billion) of bonds and bills by the government this week. India’s rupee weakened on speculation investors will favour safer assets like the dollar ahead of a report today that may show the global economic recovery is losing traction.

Market Outlook: Today in US we have exiting home sales data and reading of the Richmond Manufacturing Index.

Market sentiment

The market breadth was negative as declining stocks outnumbered the advancing ones. Of the 3,038 scrips traded on BSE, 1,740 scrips declined while 1,184 scrips advanced. 114 shares traded unchanged.

Sectoral & stock screening

Ten sectors closed lower, while three managed to post gains. The BSE Realty index was hit the most, which corrected down by 2.6%, followed by the BSE Metal index that closed 1.94% lower. The BSE Consumer Durables (CD) index gained the most in the pack and was up by 0.47%. The other sectoral indices that managed to post gains were the BSE Fast Moving Consumer Goods (FMCG) index and the BSE Health Care (HC) index.

Among 'A' group stocks that gained the most were Religare Enterprises, which posted gains of 8.42% after the company approved preferential allotment to promoters, followed by Power Trading Corporation of India (PTC) rising 4.34% and Castrol India gaining 4.18%.

The stocks that were hit the most were — Jai Corp (down 5.80%), followed by Central Bank of India (down 5.45%) and Ispat Industries (down 4.92%).

Viewing volumes

Leading integrated steel makers – Ispat Industries was the most traded stock on second straight day with over 0.78 crore shares changing hands on the BSE, followed by Vedanta group flagship company – Sterlite Industries (0.46 crore shares), wind turbine major - Suzlon Energy (0.46 crore shares), one of biggest private exploration and production firm - Cairn India (0.35 crore shares) and largest basmati rice processing and marketing company in the globe – Rei Agro (0.26 crore shares).