A higher high in Nifty will now be the first sign of reversal

The Sensex opened at 20,017 while Nifty opened at 6,046 today. Yesterday we mentioned that the trend is still down. The indices hit the day’s high in the morning session itself but soon plunged into the negative zone. Sensex hit a high of 20,072 while the Nifty hit a high of 6,065. The benchmarks tried recovering in the noon session when the Reserve Bank of India (RBI) announced the raising of ceiling of FII investments in government securities and corporate debt.  Both the Sensex and the Nifty hit a five day low (including today) at 19,884 and 6,008 respectively. The Sensex closed at 19,924 (fell 103 points, 0.51%) while the Nifty closed at 6,019 (fell 35 points, 0.58%).

What is not reflected in the small decline is the massively negative advance- decline ratio. The NSE saw AD of 244:1227 and a volume of 98.59 crore shares.

Indeed, stocks were sharply lower across the board which is reflected in the broader indices. BSE Mid-cap index fell as much as 2.51% and the BSE Small-cap index fell 2.44%.

Tata Motors', a Sensex stock, fell the most among the 30 constituents, after Jaguar Land Rover (JLR) said on Wednesday that it is likely to report lower earnings before interest, taxation, depreciation and amortisation margin in the October-December quarter compared with the previous two quarters.

Among the sectoral indices, only three ended in the positive: BSE FMCG (up 1.03%); BSE IT (up 0.37%) and BSE Capital Goods (up 0.36%). The top losers were BSE Realty (4.19%); BSE Auto (2.51%); BSE Power (1.97%); BSE Metal (1.84%) and BSE PSU (1.52%).

Ten of the 30 stocks on the Sensex closed in the positive. The chief gainers were Hindustan Unilever (1.86%); ITC (1.64%); L&T (1.56%); TCS (1.06%) and ONGC (1.01%). The main losers were Tata Motors (5.91%); GAIL (4.66%); Cipla (3.67%); Hindalco Industries (3.39%) and Sterlite Industries (2.53%).

Out of the 50 stocks listed on the Nifty, 14 stocks settled in the positive. The major gainers were L & T (1.79%); Hindustan Unilever (1.78%); ITC (1.45%); TCS (1.38%) and Kotak Mahindra Bank (1.23%). The main losers were Tata Motors (6.12%); Jaiprakash Associates (5.64%); GAIL (4.63%); Cipla (3.98%) and Hindalco Industries (3.82%).

Most of the Asian indices opened in the negative on the back of news of International Monetary Fund (IMF) trimming its 2013 forecast for global growth to 3.5% from the 3.6% it projected in October. However, it forecast an expansion of 4.1% in 2014 if the euro zone recovery takes a firm hold. It said the world economy grew 3.2% last year.

The IMF today pegged India's economic growth rate in 2013 at 5.9% and projected a higher growth of 6.4% next year in line with the gradual strengthening of global expansion.

The Asian shares underwent volatile session with the positive news about Chinese manufacturing data on one hand while the on the other North Korea threatening a nuclear test and tepid results from Apple Inc.

China's manufacturing is expanding at the fastest rate in two years. The preliminary reading of a Purchasing Managers' Index was 51.9 in January, according to a statement from HSBC Holdings Plc and Market Economics today. That compares with the 51.5 final reading for December.

Spanish unemployment rose to a record in the final quarter of 2012 as Prime Minister Mariano Rajoy's government imposed the deepest budget cuts in the country's democratic history. The number of jobless approached 6 million people, or 26.02%, from 25.01% in the previous three months, the National Statistics Institute said in Madrid today.

The U.S. House of Representatives on Wednesday passed a bill that suspends the debt limit until May 19, a move that is likely to defuse immediate fears of a damaging U.S. debt default though not removing a longer-term threat.

Among the Asian indices Nikkei 225 was the top most gainer today, rising 1.28%, while the KOSPI Composite Index fared the worst losing 0.80%. European indices were mostly trading in the green while among US Futures indices, DJIA index was trading in the green while S & P 500 was trading in the red.

Jindal Steel and Power (JSPL) bagged an Rs 500 crore order from Power Grid Corporation for supply of 80,000 tonnes of steel, which will be used in setting up two transmission towers in Southern India. The order will be executed from February onwards. JSPL fell 1.64% to close at Rs419 on the BSE.

Rallis India is planning to raise its stake in Zero Waste Agro Organics to 51% by next financial year. During the quarter ended December 31, 2012, the Rallis acquired 22.81% stake in Zero Waste Agro Organics. Rallis fell 3.74% to close at Rs135.25 on the BSE.