Daily Market View: Beginning of a new downtrend?
Moneylife Digital Team 29 June 2010

We had suggested yesterday that a reversal can hit anytime. But is this the start of a new leg down? We will know in a few days. Meanwhile, watch 17,400

The market pared all gains accrued in Monday's trading session to close lower today on weak global cues. The Sensex ended at 17,534, down 240 points (1.35%) and the Nifty settled at 5,256, down 77 points (1.45%). The indices started the day on a weak note, taking cues from Asian markets, which extended further losses on a decline in the Chinese market on economic growth worries in the country. Worries about the recent fuel price hike stoking inflation also weighed on investors. Lower opening of the European markets also added to the woes, resulting in the market closing with a deep cut.

Chinese stocks were on a downward trend after a revision by the Conference Board of its April 2010 gauge for the outlook of the country's economy.

Sentiment was also down on lowered pricing range for the Shanghai portion of Agricultural Bank of China's upcoming initial public offering (IPO). The Shanghai Composite was down 4.2% and Hong Kong's Hang Seng lost 2.5%. In other Asian markets, key benchmark indices in Taiwan, South Korea, Japan, Indonesia and Singapore fell by 1.03% to 2.19%.

US stocks were down on Monday as gains in consumer-related stocks, including tobacco shares, were offset by losses in the energy sector. The Dow was down 5.3 points (0.05%) to 10,138.5. The S&P 500 was down 2.2 points (0.2%) to 1,074.5. The Nasdaq shed 2.8 points (0.1%) to 2,220.6.

Back home, the Insurance Regulatory and Development Authority (IRDA) announced drastic changes to Unit-linked Insurance Plans (ULIPs) on Monday, cutting agent commissions, increasing the lock-in period and making it a more risk-based product.

Foreign institutional investors were net buyers of equities worth Rs792 crore on Monday. Domestic institutional investors were net sellers of stocks worth Rs94 crore.

The board of MMTC (down 1.8%) has recommended dividend of 90% on the paid-up equity capital for the financial year 2009-10. It also approved sub-division of each equity share of face value of Rs10 each into 10 shares of face value of Re1 each. The subdivision is to be effective and simultaneous with the allotment of bonus shares in the ratio of 1:1.

IL&FS Transportation Networks Ltd (up 1.1%) has signed a concession agreement with the National Highways Authority of India (NHAI). The company had been issued a Letter of Award dated 3 May 2010 by NHAI for rehabilitation, strengthening and four-laning of the Chenani to Nashri section of NH-1A.

State Bank of India (down 0.3%) has fixed the base rate at 7.50% per annum with effect from 1 July 2010.

Shares of Samruddhi Cement got listed on the National Stock Exchange (NSE) today, post its demerger from Grasim Industries Ltd and amalgamation with UltraTech Cement. The stock opened at Rs579.75 and moved between a high of Rs590 and low of Rs495. The share last traded at Rs509.40. Total traded quantity was 5,67,071 shares and turnover was Rs29.26 crore. Grasim transferred its cement business via a demerger to Samruddhi Cement, wherein Grasim shareholders received one share of Samruddhi (face value Rs5) for one share held. Later, Samruddhi Cement will be merged with UltraTech Cement in the ratio of 4:7.

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