The market may move lower but a short rebound is round the corner

Political developments at the Centre kept the market volatile throughout the session and resulted in the indices closing lower for the fifth straight day. The fall in the past three days was on a declining volume. Today the National Stock Exchange (NSE) saw a volume of 57.07 crore shares. Last hour panic-selling resulted in the Nifty hitting the maximum low since 21 August 2009—at 4,531. At present the market is in an indecisive zone. Further move will depend on any major events.

The market opened higher tracking a firm trend in the Asian region in morning trade. Bargain hunting amid the four-day decline helped the indices open in the positive. The Nifty started the day at 4,636, up 23 points, and the Sensex resumed trade 57 points higher at 15,436. Buying in power, healthcare, oil & gas and PSU sectors supported early gains.

The benchmarks hit their intraday high in early trade with the Nifty rising to 4,637 and the Sensex scaling 15,448. However, profit booking crept in at higher levels which pushed the market into the negative. The indices remained range-bound till noon, after increased selling pressure caused the market to venture further southward.

However, intermittent buying enabled the market venture into the green. But the recovery was short-lived as the indices entered the red once more. A huge bout of selling in the last hour pushed the market to the day’s low. At the lows, the Nifty fell to 4,531 and the Sensex tumbled to 15,136. Over selling led the Sensex and the Nifty to close at more than two year closing low of 15,175 (down 204 points,1.33%) and 4,544 (down 69 points, 1.49%).

The advance-decline ratio on the NSE was in favour of the losing stocks at 437:1268.

Among the broader indices, the BSE Mid-cap index tanked 1.86% and the BSE Small-cap index declined 1.45%.

In the sectoral space, BSE Fast Moving Consumer Goods (up 0.37%) was the lone winner. The losers were led by BSE Capital Goods (down 3.50%); BSE Metal (down 3.48%); BSE Realty (down 2.71%); BSE Power (down 2.59%) and BSE Auto (down 2.44%).

The best performing stocks on the Sensex were ONGC (up 2.39%); HDFC Bank (up 1.98%); ITC (up 1.11%); HDFC (up 0.69%) and Hindustan Unilever (up 0.16%). The top losers were Jaiprakash Associates (down 7.26%); Tata Steel (down 5.27%); Tata Power (down 5.23%); Hero MotoCorp (down 5.16%) and Larsen & Toubro (down 5.14%).

The key gainers on the Nifty were Ranbaxy (up 3.24%); ONGC (up 2.39%); HDFC Bank (up 2.32%); ITC (up 1.19%) and BHEL (up 0.90%). JP Associates (down 8.23%); Hero MotoCorp (down 6.19%); L&T (down 5.90%); Tata Steel (down 5.72%) and Tata Power (down 5.67%) emerged as the top losers on the index.

Markets in Asia closed mixed as tensions relating to North Korea eased but investors were cautious on account of the Eurozone debt crisis. Optimism in the US economy also supported investor sentiments.

The Hand Seng added 0.06%; the Nikkei 225 gained 0.49%; the Seoul Composite surged 0.91% and the Taiwan Weighted rose 0.44%. On the other hand, the Shanghai Composite shed 0.10%; the Jakarta Composite fell 0.48% and the Straits Times lost 0.14%.

Back home, foreign institutional investors were net sellers of stocks totalling Rs450.37 crore on Monday. On the other hand, domestic institutional investors were net buyers of shares amounting to Rs18.60 crore.
BEML has won an order worth Rs318 crore for the Metro rail project in Jaipur. The public sector company will supply 10 train sets of four cars each, totalling 40 cars for the project, it said on Tuesday. It is also expecting further Rs60 crore worth of orders for the Jaipur Metro project. The stock gained 1.40% to close at Rs468.50 on the NSE.

Infosys BPO, the business process outsourcing subsidiary of Infosys, has inked a definitive agreement to acquire all the outstanding share capital in Australia-based Portland Group, a leading provider of strategic sourcing and category management services. The acquisition is expected to be completed by early January 2012. The purchase consideration for the deal is AUD37 million, subject to customary post-completion adjustments.  The stock fell 0.01% to close at Rs2,676 on the NSE.

Hospital chain Fortis Healthcare (India), owned by billionaire brothers Malvinder and Shivinder Singh, is set to close the acquisition of Singapore-based group firm Fortis Healthcare International by end-December. Last month, Fortis Healthcare (India) had announced that it would buy the overseas firm for $665 million. The stock closed 0.30% down at Rs90.45 on the NSE.