Key indices extend losses in late trade

Key benchmark indices extended losses in late trade as European stocks declined ahead of a parliamentary vote in Slovakia on changes to the euro zone's rescue fund. CD stocks had a good run up in today’s session, while IT stocks fell on profit taking.

Asian stocks rose today sending a positive signal. Financial shares surged in Hong Kong after a state-owned investment company bought shares in largest four banks. Japanese equities climbed on resuming trade from a holiday.

The Dow Jones Futures is currently trading 34 points or 0.30 per cent down at 11334 indicating a negative sentiment in the US markets.

Among the SENSEX stocks, Sun Pharmaceuticals rose by 4.47 per cent and in Auto space Tata Motors, Bajaj Auto and Hero motor Corp rose by between 0.5 to 3.64 per cent. Index heavyweight Reliance Industries (RIL) which had gained over expectations of better Q2 results, gave up almost all the intraday gains and closed 0.25 per cent lower. Power heavyweight NTPC closed 3.49 higher while Tata Power closed 0.82 lower than previous day. IT stocks closed lower than previous day. Infosys lost 3.41% to Rs 2,509.20 on profit taking ahead of its Q2 results tomorrow. Drug maker Wockhardt Ltd gained 11 per cent over the Bombay high court order to clear all dues to its bond holders.

BSE clocked turnover of Rs 2701 crore, higher than Rs 2214.13 crore on 10th October 2011. The market breadth, indicating the overall health of the market, was positive. Out of 3239 stocks traded, 1285 stocks advanced while 1018 declined. A total of 106 stocks remained unchanged.

In conclusion, we recommend our investors to not just blindly buy into this rally as there are still the macro concerns looming at large over the global as well as domestic economy. A high interest rate scenario coupled with stubborn inflation and subdued expectations for the Q2FY12 earnings still remain a key downside to this rally.