Domestic equity benchmarks staged a smart recovery in last leg of trade and ended the session flat, pairing almost all of their early losses, supported by short-covering in beaten down but fundamentally strong stocks. Earlier, markets after a positive start entered into red terrain on the back of feeble global cues and extended their downfall to touch intraday lows. Sentiments also remained down-beat on report that FDI in the services sector, which accounts for over 60 per cent to India’s GDP, declined by about 61 per cent year-on-year to $1.8 billion during April-January.
Sentiments were also weighed down with HSBC survey report saying that private sector activity in emerging market economies fell for the fourth consecutive month in March. As per the report, while China posted a marginal decline for the second month running, India slipped back into contraction. BJP released its manifesto for the Lok Sabha polls with the pledge of ‘Ek Bharat-Shresth Bharat’. The party said its focus will be on economic growth, employment, E-governance, boosting tourism and simplification of tax regime, among other things.
Global cues remained sluggish with European markets opening mostly in the red and CAC, DAX and FTSE all were trading in the red in early deals. Most of the Asian markets ended in the red, with some of the indices snapping their nine-day gaining streak, led by Japanese market ahead of the Bank of Japan’s two-day policy meeting. Moreover, the US markets ended lower in previous session on getting mixed monthly jobs data, while the non-farm payroll employment rose; the unemployment rate remained same at previous month’s level.
Back home, buying which emerged in late trade mainly acted as saving grace for domestic equity markets and helped Sensex to re-conquer its crucial 22,300 level. Rally in pharma space too aided the sentiments, led by over three percent rise in Sun Pharma on report that the company has entered into definitive agreements to acquire 100% of Ranbaxy in a $4 billion all-stock transaction. The merger between the two companies will create India’s largest pharmaceutical company and the world’s fifth largest generics company. Shares of cement manufacturers too remained on buyers’ radar on expectations of higher profit growth for the quarter ended March 2014, on a sequential basis, due to pick-up in cement prices and demand.
Top gainers of the Nifty were UltraTech Cement up by 3.11%, Ambuja Cements up by 3.02%, Sun Pharma up by 2.65%, NMDC up by 2.35% and SSLT up by 2.05%. On the other hand, Jindal Steel & Power down by 5.96%, BHEL down by 3.43%, DLF down by 3.15%, IDFC down by 2.32% and CIPLA down by 2.08% were the top losers.
GLOBAL UPDATES:
European stocks dropped in early trading halting a three-week rally and tracking a sell-off on Wall Street on Friday where a number of high-growth companies mostly in the tech and biotech sectors tumbled. Both Dow and Nasdaq futures started on a negative note at this evening and were trading in Red.
Technically speaking, today RSI closed at 70, MACD was Positive at Signal line, India VIX was at 25~. Nifty closed below its 5 DMA (6719) but still above its 20 DMA (6597), 50DMA (6333) and 200 DMA (6062) which indicate that short term trend is negative and profit booking emerges on higher level but medium and long term trend is still positive. Investors need to book some profit in front line stocks and may watch out for buying opportunity in good B1 B2 stocks with a purely trading motive.
Markets closed on a Negative note with majority of the sectors closed in Red but BSE-CD & Realty were the worst performing sector today.
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