Markets fall further in the last hour of trade

Indian markets moved further southwards in the last hour of trade on the back of F&O expiry and the sell-off, which resulted in both the bourses closing down by more than 1%. Even a good set of inflation numbers did not succeed in moving the markets northwards.

Food inflation decreased by 139 bps to 0.42% for the week ended Dec 17, 2011, while Primary Articles' inflation stood at 2.7% as against 3.78% on a WoW basis. Among the sectors, Metals and Healthcare closed in the positive territory. Oil & Gas, Capital Goods and Realty were the worst performing sectors, which dragged the market down.

Other Asian markets closed today’s session in a mixed bag, as investors expressed fears over the European sovereign debt crisis. The Nikkei and Hang Seng closed in the red, while Shanghai closed in the green zone.

European markets are trading in the green on the back of the Italian long-term debt auction.

The Dow Jones Futures is currently trading 19 points or 0.16% up at 12100, indicating a positive sentiment in the US markets.

Among the Sensex stocks, Tata Power witnessed heavy profit booking and was among the leading index losers, down 4.03% to Rs 88. Oil & Gas heavyweight, RIL, which also holds the major index weights, closed down 4% to Rs 709. ICICI Bank and HDFC Bank closed by lower 2.45% and 2.42% respectively. Other stocks like Hero MotoCorp, TCS, ONGC and Sun Pharma also closed lower in the red zone.

On the other hand, Jindal Steel witnessed buying after losing most of its ground yesterday. The scrip today closed 2.38% higher at Rs 465.80. In the Metals pack, Hindalco and Sterlite Industries both closed the day in the positive zone, up by 0.69% and 0.89% respectively. HUL, Coal India and NTPC were among the other index gainers that closed marginally in the green zone.

Mahindra & Mahindra gained 0.18%, moving to Rs 688, after the company said that it will raise the prices of its XUV500 sports utility vehicle by 3%-4%. Union Bank of India surged by 2.53% to Rs 163.95 after the bank reduced its base rates by 10 bps to 10.65%, which indicates the signs of the interest rate peaking out and a possible reversal.

The market breadth, which indicates the overall health of the market, was negative. Of the total of 3140 stocks traded on the BSE, 1737 declined, 1266 advanced and 137 remained unchanged.

In conclusion, we expect the markets to continue trading sideways on the back of the holidays season. Investors are also very jittery about investing in markets that fail to provide any direction.

Finally, we at DSIJ, wish all our readers a prosperous new year ahead.