Indices end lower amid volatility

STOCK REPORT

Key indices ended marginally lower in volatile trade Tuesday. Dealers said the market was correcting as it was in an overbought zone. Indices started off on a sluggish note, then surged briefly.

Selling in index heavyweights like Reliance Industries, ITC and Tata Motors caused the weakness. Cement majors GACL and Grasim rose 4% and 2% respectively.

Most automobile, technology, and oil retailing shares ended lower. Steel and most cement shares ended firm.

The Bombay Stock Exchange's Sensex closed at 7595.57, down 10.60 points from Monday's close. The index had touched an intra-day high of 7686.85 and a low of 7559.80.

The National Stock Exchange's Nifty closed at 2318.70, down 5.70 points. It had earlier touched a intra-day high of 2342.20 and a low of 2303.10.

The market breadth on the BSE was marginally negative, with 1,206 stocks advancing, compared with 1,330 decliners.

The total traded turnover on both exchanges combined was around 109 billion rupees, compared with 102 billion rupees Monday.

Grasim Industries, Wipro, Shipping Corp. of India, ABB, ICICI Bank and Larsen and Toubro, Hindalco Industries were the prominent Nifty gainers, up between 1-2 per cent.

Among losers, Glaxosmithkline Pharmaceuticals, National Aluminum Co., Videsh Sanchar, Mahanagar Telephone Nigam, Indian Petrochemicals, Bharat Petroleum Corp. and Dabur India were down between 2-3 per cent.

Raj Bhandari, director, Networth Stockbroking said "The Nifty has closed above 2310, and I see this as an indicator that the bullish trend may continue."

He said that the Sensex was likely to trade in the range of 7600-7800 near-term. "I would advice people to buy below 7600 and book profits above 7800 level," he said.

Alpesh Mehta, head dealer, Keynote Capitals said "The overall market trend is still positive. I don't expect a major fall".

However some dealers advised caution and said that the indices had not corrected fully.

Deepak Shah, assistant vice president, Pranav Securities, said that he expects the Sensex to be at 7200 level by August end. "The near term support for the index is 7550. If it is breached, Sensex could fall to 7200, and the market would pick up thereafter" he said.

Shah said that the indices were most likely to undergo a correction. "Nifty futures is facing heavy selling pressure on the upper side of 2360, it just can't break past this level. I don't see how the index could gain significantly this month."

He said that 2310 and 2285 were the immediate support levels for the Nifty.