Edginess reared its head yet again as market participants rushed to the exit door in the later part of the day in face of an impending weekend and associated uncertainties. Continuing with the nervousness witnessed on the previous four Fridays, the benchmark indices more than surrendered all the gains of Thursday's session to have another ignominious closing on the last day of the week. The lingering concerns on the inflation fronts, surge in crude oil prices and the deteriorating situation in Egypt seem to have only aggravated the situation. The Sensex came off more than 500 points from the day's high to end at 18008, lower by 441 points and the Nifty shut shop below the psychological level of 5500 at 5395, down 131 points. The midcap index ended at 6734, lower by 93 points and the smallcap index ended at 8331, down 132 points. Realty and FMCG were the top sectoral losers on the BSE.
Prime Minister Manmohan Singh's warning that the high headline inflation was beginning to pose a serious threat to India's high growth plans would have just added to the nervousness. It may be recollected that headline inflation for December has accelerated to 8.40% on the back of high food inflation, which reached a one-year high of 18.3% in end December.
The markets had a subdued opening in wake of the directionless cues from the US front. The Dow was up a mere 20 points and Nasdaq had closed virtually unchanged. Japan's Nikkei did end higher by around a percent and the European indices added about a half a percent each in mid-day trades, but these failed to rescue the domestic bourses from the morass that they slipped into with every passing hour. Most Asian markets were shut on account of the Chinese Lunar New Year holidays.
M&M weakened by 5.3% at Rs 668 to emerge as the top loser on the BSE. India's largest tractor and utility vehicles maker announces Q3 results on Wednesday. The company's total sales rose 21.7% to 57,217 units in January 2011 over January 2010, aided by 21.8% growth in automotive sales to 36,718 units and 21.4% growth in tractor sales to 20,499 units. ITC shed 4.2% at Rs 152 and Reliance Infra lost 3.7% at Rs 678. Tata Power, Hindalco and L&T were the other significant losers on the BSE. And DLF lost 2.7% at Rs 237 after gaining nearly 7% on Thursday.
Bajaj Auto was the sole gainer, adding 1.2% at Rs 1226. The second largest bike maker's total sales had risen 18% to 3.13 lakh units in January 2011 over January 2010.
The market breadth was weak. Out of 2982 stocks traded on the BSE, there were 873 advancing stocks as against 2003 declines.
Deepak Singh Tanwar, technical analyst, said that the overall outlook is still negative and will remain so until the level of 5580 is crossed on the Nifty. And according to Shailesh Kadam, there are no significant changes in the open interest in Nifty during bouncebacks. Since the 5500 and 5600 Call options are seeing writing, it will be difficult to sustain levels above 5550-5570 and Nifty will again drift to the 5400 level.