Markets close flat on profit booking

Indian markets closed on a flat note on profit bookings over yesterday's rally in Sensex. Fall in European markets added some pressure in Indian equities as well. The benchmark index got some support from stocks from Banking, IT, Realty and Teck sector.

Primary Articles inflation index fell to 10.60 per cent in the week under review, from 10.84 per cent in the week ended September 24. Food Articles inflation fell to 9.32 per cent in the week ended October 01, versus 9.41 per cent in the preceding week. This indicates that the headline Sept inflation which is expected tomorrow may not show any major signs of improvement and would pretty much be in line with market estimates of 9.7 per cent.

European shares were trading low as Slovakia is yet to approve the Euro zone rescue fund. Asian markets extended their strong rally taking cues from Wall Street and on the hopes that Euro zone leaders will be able provide a firm solution to the debt crisis

The Dow Jones Futures is currently trading 22 points or 0.19 per cent down at 11394.00 indicating a negative sentiment in the US markets.

Among the SENSEX stocks, ICICI bank stocks surged by 2.22 per cent. Two other banking stocks SBI and HDFC bank also ended up in green. Tata steel rose by 1.63 per cent. Yesterdays star performer Infosys gained 0.55 per cent while TCS shares surged by 1.06 per cent. Shares of Jindal steel, Tata motors and Hindalco industries were among the major losers today. Shares of telecom Major Bharti Airtel declined by 1.16 per cent.

On quarterly results front we advice our readers to keep a watch on stock price of Gateway Distriparks (BSE:532622). Gateway Distriparks which is in the business of cargo handling and logistics has gained by 17 per cent over last 3 months. Company is to announce its quarterly results tomorrow. In June Quarter Company reported 46 per cent growth in its EPS over corresponding period last year.

BSE clocked turnover of Rs 2515 crore, higher than Rs 2716.64 crore on 12th October 2011. The market breadth, indicating the overall health of the market, was positive till the afternoon session, which changed negative in the later trading sessions. Out of 3238 stocks traded, 1619 stocks declined while 1485 advanced. A total of 134 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.