Volatile Trading Day Sees A Red End

The Indian markets had a volatile trading day today. They opened the day in the negative zone, then tried to recover during the noon, remained positive for some part of the day, but finally ended in the red. During the last hour of trade, the markets gave up their gains on the back of news that Indonesia has been hit by an earthquake of a magnitude of 8.9 on the Richter scale and that this may have severe impact on the Indian economy. Among the sectoral indices, Capital Goods, Oil & Gas, Consumer Durables and Metals closed lower, while Healthcare, Bankex, FMCG and IT closed on the higher side.

The peer Asian markets ended in a mixed bag, with Hang Seng and Nikkei closing today’s session on a negative note, and Shanghai closing marginally in the green zone. The Chinese markets closed higher on the back of speculations that property sales will increase and the government may take further steps to fuel growth in the economy.

The European markets are trading higher, with DAX and CAC trading higher more than 1% up, while FTSE is up 0.55%. The markets are trading higher after the Aluminum Company of America (ALCOA) posted a surprised profit in the March 2012 quarter.

Dow Jones Futures is currently trading 78 points or 0.60% up at 12758, indicating a positive sentiment in the US markets.

Back home, Indian Power and Metals stocks moved southwards following the news of the earthquake in Indonesia, as some of them are dependent on coal from the nation. Jindal Steel and Sterlite Industries closed down 2.92% and 1.97% respectively. Capital Goods stocks, BHEL and L&T, also closed down 1.92% and 0.33% respectively. Telecom major, Bharti Airtel, is also a leading index loser, down 2.27% to Rs 322.85. Other stocks like ONGC, Maruti Suzuki, Hero MotoCorp etc. closed the day marginally in the red zone.

On the other hand, Sun Pharma was the leading index gainer, closing 2.08% up at Rs 578.95. FMCG stocks, which are considered defensive bets during uncertain times, moved higher. Stocks like HUL and ITC closed higher by 0.22% and 0.07% respectively. Others like SBI, HDFC Bank, Mahindra & Mahindra, Wipro, etc. closed higher in today’s trading session.

Indraprastha Gas closed marginally higher by 0.28% at Rs 230.45 as investors saw some buying opportunity in the scrip after it was beaten down heavily in the past trading sessions. Aviation stocks like Kingfisher Airlines and Jet Airways moved higher by 6.43% and 5.26% after the news that the government may raise the limit of FDI allowance in the aviation sector.

The market breadth, which indicates the overall health of the market, was negative. Out of the 3222 stocks traded on the BSE, 1749 declined, 1348 advanced and 125 remained unchanged.

We expect the markets to continue to remain volatile.