The markets ended a choppy session of trade on a negative note due to losses in auto shares. The BSE Sensex was unable to sustain 17,000 levels and closed at 16,884, down 75 points. The Nifty ended at 5,077, down 22 points.
Earlier in the day, the Sensex fluctuated between gains and losses. The index touched a high of 17,084 in the morning session following positive cues from Asia; however, the index received a fresh jolt and touched a low of 16,865 after European markets reversed gains.
The markets were unable to cross the crucial resistance of around 5,180 levels and succumbed to selling after the 3% rally yesterday. Ashish Chaturmohta from IIFL Wealth said, “We are in a consolidation mode, which is in a broader range of 4,900-5,250 levels. Option distribution shows 5,200 level is a crucial resistance. Further direction can be clear if any of these levels are breached on closing.”
On the macro front, food inflation for the week ended October 1 eased marginally to 9.32%, but prices of staples continued to pinch wallets leaving room for the Reserve Bank of India to hike policy rates by another 25 bps during the October end policy.
Asian markets rallied on Thursday, led by gains in the exporter and commodity shares following positive news from Europe. The European Commission President - Jose Manuel Barroso pledged to recapitalize debt ridden banks which revived risk appetite for equities. The Hong Kong’s Hang Seng Index rose 2.3% and the China’s Shanghai Composite added 0.8%. The Japan’s Nikkei Stock Average bucked trend, was down 1%.
The European markets were trading lower after French retailer Carrefour cut profit targets citing uncertainty in the global environment. The FTSE 100, CAC40 and DAX were off over 1% each.
Back in India, the BSE Auto index was the top loser, down 1%. Tata Motors plunged over 3%, Maruti Suzuki declined over 2.5% after management said that government of Haryana declared workers’ strike illegal. Hero Motor Corp was down 1%.
BSE Capital Goods index was the next worst hit, down over 1%. The top losers were Praj Industries, down 3%, Larsen & Tourbo and BGR Energy (down 2% each).
Investors cashed into banking shares. Yes Bank rallied 4%, Indusind Bank and Bank of Baroda advanced 2% each.
Coal India was one of the top losers among the Sensex stocks, down 2% to Rs 332 after the coal ministry agreed to the power ministry’s demand to divert a part of the coal being currently sold through e-auction to the power sector. Hindalco and Tata Power shed 2% each. On the other hand, ICICI Bank was the top gainer, up 2% to Rs 879. Tata Steel and TCS were up over 1% each.
The overall breadth was negative as 1,403 stocks declined for 1379 stocks which advanced on the BSE.
