Markets Recover Partially From S&P Shock

The Indian markets remained highly unpredictable today. The morning saw flat trades in the markets. In the afternoon, the news of the ratings agency S&P cutting India's outlook from 'stable' to 'negative' rocked the markets. Both the key indices went down sharply. By closing, they recovered partially from the shock, but still ended in the negatives. Nifty held the psychological 5200 levels. After S&P’s outlook cut, the markets will now watch the stance of other rating agencies such as Fitch and Moody's.

The Asian indices traded higher and closed in the green. Nikkei and Shanghai closed with gains, while Hang Seng closed with partial losses.

The European indices opened in the green, and have continued to trade positive.

Meanwhile, Moody's has said the Indian government is the biggest factor that is harming the growth of the country. The agency also said that there is broad weakness in all the sectors, particularly in mining and manufacturing.

On the sectoral front, the FMCG index was up by 0.55% by the end of the day. The Auto index was also up by 0.23%. All the other indices closed the day in the red. IT, Realty, Power, PSU and CD were down by over 1% each.

Among individual stocks, Wipro lost 7.29% after weak Q1 guidance. United Spirits held fort with 8.26% gains over the news that its promoters will not sale their stake in the company. Pharma firm, Wockhardt, gained 3.5% over the new product approvals. Indiabulls Financial Services was also up for the entire day. Petronet LNG, on the other hand, was down as the company reported a decline in the business performance sequentially. It also reported declined gas volumes. Others like IRB Infra, PFC, Lanco Infra, etc. were also down today.

Bharat Electronics posted its Mar 2012 quarter results today, where its net dipped by 16%. The stock, which had surged in the morning, trimmed the gains by closing time. Aurobindo Pharma has received the final approval for Olanzapine Tablets; however, the stock was flat in the trades.

Companies like HCL Infosystems, YES Bank, Sterlite Industries and Deccan Cements announced dividends in the later market hours today.

The shares of ELANTAS Beck India attained a new high today. The top turnover was seen in SBI, Infosys, United Spirits etc. High volumes were seen in the Lanco Infra, ACIL, SpiceJet, Kingfisher Airlines and IVRCL counters.

The market sentiment remained negative all of today.

After the weak PMI numbers posted in Germany, there is news that Britain’s economy has slid into recession for the first time since 1970. The European debt crisis still haunts, and the recovery in the US economy is very fragile. With the outlook of India changed to negative, we, at DSIJ, believe that the markets will remain volatile for the remainder of the week.