Markets end in red

In Asia Nikkei fell as a downgrade of Italy’s credit rating by Moody’s form Aa2 to Aa3 overshadowed signs that European officials may reach consensus on recapitalizing the region’s banks to protect them from the sovereign-debt crisis.

The Dow Jones Futures is currently trading 20 points or 0.48 per cent up at 10735 indicating a positive sentiment in the US markets.

Among the SENSEX stocks, State bank of India continued its losses today and was down 4 per cent to Rs 1715. SBI hopes to receive an injection of upto USD 2 billion from the government by this fiscal. ICICI and HDFC bank also saw downward momentum and were down by 3 per cent. Metal stocks continued its losing trend and companies like Jindal Steel, Hindalco were down 3 to 4 per cent and were at their 52 week’s low. Reliance Industries closed marginally in red and has served a notice for suspension of gas supplies to four fertilizer plants in Uttar Pradesh from tomorrow, unless they enhance their financial guarantees to cover for state sales tax. The Carlyle Group acquires 9% stake in India Infoline Limited, one of the largest financial services groups in India. The stock was up 2.59 per cent at Rs 71.20.

BSE clocked turnover of Rs 2364 crore lower than Rs 2613 crore on 4th October 2011. The market breadth, indicating the overall health of the market, was negative. Out of 3174 stocks traded, 1852 stocks declined while 1193 advanced. A total of 129 stocks remained unchanged.

 With Q2FY12 results season drawing close, investor focus may shift to expectations of Q2 results of individual firms. A poor set advance tax numbers posted by top 100 companies suggest corporate profit growth is likely to be muted in the second quarter. We recommend our readers to closely watch the management commentary at the time of announcement of Q2 September 2011 results, which will provide cues on futures earnings outlook.

In conclusion we believe that there is currently no clear picture as to where the markets are heading with the global scenario looking very gloomy as there are possibilities of further downgrades by rating agencies.