Markets in the red, metal stocks take a hit
DSIJ Intelligence / 01 Nov 2011
Markets are believed to be reacting to a fall in core sector growth that hit a 30-month low. The 8 crucial sectors grew by just 2.3% y-o-y in September.
Mid Session Commentary 01st Nov 2011 (10:30AM)
As mentioned in our morning update markets have opened on a negative note owing to renewed doubts about the euro zone's debt crisis. Fresh worries about Europe's debt crisis have surfaced abruptly over Greece's prime minister reported statement that a referendum will be held on the latest aid proposals for the country.
| Benchmark Indices | ||
| Index | Rate | % Change |
| Hang Seng | 19,584.69 | -1.41 |
| Nikkei | 8,859.60 | -1.43 |
| Shanghai | 2,468.49 | 0.01 |
| SENSEX | 17585.41 | -0.68 |
| NIFTY | 5288.2 | -0.72 |
Other Major Asian markets are also seen trading in the red zone following weak global cues on concerns over progress in resolving Europe's debt crisis. A stronger dollar following Japan's intervention to weaken the yen also stoked selling in equities, commodities and other risky assets and buying in low-risk government bonds.
Back home, the markets are believed to be reacting to a fall in core sector growth that hit a 30-month low. The eight crucial sectors, having a weight of almost 38 per cent in the IIP, grew by just 2.3 per cent in September year-on-year indicating another weak set of IIP growth for the month of September.
Most of the sectoral indices are trading in red with metal shares leading the decline. BSE metal index slipped 1 per cent to 11,766. Capital goods, realty and FMCG indices were down around 1 per cent each. Sterlite dropped 2.7 per cent to Rs 124. Hindalco and Tata Steel slipped 1.4 per cent each while Jindal Steel dropped 1 per cent in opening trades. Larsen & Toubro is the major dragger and is down 1.5 per cent at Rs 1,390.
From the FMCG pack, ITC slipped 1.4 per cent at Rs 210. Hindustan Unilever after yesterday's smart rally was down 0.3 per cent at Rs 374.
Reliance dropped 0.5 per cent to Rs 873 after RIL put speculations to rest after denying reports of acquiring US-based Valero Energy Corp.
Meanwhile, Sun Pharma has gained 2 per cent at Rs 514. Wipro added 1.8 per cent to Rs 373. Tata Motors, BHEL and ONGC are up in trades. Bajaj Auto in up marginally ahead of its sales numbers.
Among other stocks, NMDC reported a 42 per cent rise in its September 2011 quarter net profit at 1,963.15 crore. The stock has surged 4.7 per cent to Rs 248.
EIH gained 2.7 per cent to Rs 96.60 after the company reported a net profit of Rs 16.59 crore for the second quarter ended September 30, compared to a net loss of Rs 15 crore in the same period last year. Net sales zoomed 11.02 per cent to Rs 217 crore. Nita Ambani has been appointed as an additional director of the company on Monday.
The market breadth, indicating the overall health of the market, is negative. On BSE, 1119 shares fell and 960 shares rose. A total of 112 shares remained unchanged.
In conclusion, we stick to our pre market expectation of the market behaving in a negative manner for the day. We expect the European markets to provide some vital cues on the desired direction of the market trend in late afternoon session. Nevertheless we shall keep updating you regularly through our market commentary.
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