Markets have a soft closing

The markets had another weak session of trade on the back of not-so-encouraging cues from the global front. Fund requirements surrounding the mega IPO of Coal India, which is expected to garner around Rs 15, 000 crore, also seems to be denting the sentiment back home. The Sensex made further inroads below the psychological 20k mark, which was breached in the previous session. The BSE benchmark ended at 19,872, lower by 111 points and the Nifty ended at 5982, down 45 points. The mid-cap index ended virtually unchanged at 8289 and the smallcap index ended at 10582, lower by 56 points.

The day appeared bleak, to begin with. The US stocks had posted their biggest loss in two months on Tuesday on fears banks might be on the hook for billions of dollars in souring mortgage bonds. The Dow dropped 165 points to 10,978 and Nasdaq fell 43 points to 2,436. Wall Street weighed on Asian sentiment this morning and an unexpected interest rate hike by the Chinese central bank further added to the woes across the region; Shanghai Composite Index dropped 0.55%, Hang Seng Index lost 1.5% and Nikkei fell 2.2% in early trades. And our markets opened lower, albeit marginally, in line with their global counterparts. But things began to look up as the day progressed; the Asian markets cut their early losses as the China shock weared off and Europe had a flat-to-positive start. But in a mirror image of the previous day, a late bout of selling took a toll on the indices back home at closing.

It may be recollected that the Sensex had ended shy of the 20k mark at 19,983, weaker by 185 points and the Nifty had just about managed to cling on to the 6000 mark at 6027, down 48 points in the previous session.

The initial public offers (IPO) of Coal India have received a robust response from the qualified institutional buyers (QIBs) segment. The reserved portion of QIBs, which closes today, has been subscribed 16 times, while the retail and non-institutional investors' portion have been subscribed bby a mere 0.46 and 0.60 times respectively.

Frontline metal stocks took it on the chin in today's session  due to demand concerns stemming from China after the Central Bank in China raised the one-year lending rate and deposit rates by 25 bps. Sterlite weakened by 3.5% at Rs 170 to emerge as the top loser on the BSE. Tata Steel shed 2.7% at Rs 615 and Hindalco lost 1.72% at Rs 202. And continuing with its weakness post the Q2 results, HDFC declined by another 2.7% at Rs 700.  And HCL Tech slipped by 3% at Rs 425 after reporting a 35% drop in its first quarter ended September 2010.

On the other hand, Tata  Power strengthened by 1.1% at Rs 1390, NTPC gained 0.9% at Rs 205 and L&T added 0.5% at Rs 2004. And index heavyweight RIL edged higher by 0.4% at Rs 1048.

The market breadth was negative. Out of 3079 stocks traded on the BSE, there were 1090 advancing stocks as against 1819 declines.