Markets Close Negative On S&P Report

The Indian markets, which had made a comeback in the last week and again in the morning today, have finally closed the day negative. This was after the S&P report, which said that India may become the first BRIC nation to lose the investment grade rating. Earlier this year, S&P had lowered the country's outlook to Negative. India's current credit rating is BBB-, which is the lowest category in the investment grade. If it loses the rating by even one notch, then BB+ will be the immediate lower credit rating available to the country, which is considered the highest speculative grade by market participants.

Meanwhile, IT giant TCS held an analyst meet today at which the management has said that the Jun 2012 quarter will be better than Mar quarter. Besides, it has also reaffirmed that it will beat NASSCOM's industry guidance of 11%-14% growth in dollar revenues.

While the Indian markets closed in the negative, the global markets have managed to run in the green after the bailout for Spain. All the Asian markets traded in positives and also managed to hold the gains at closing. Hang Seng was up 2.44%, Nikkei shown gains of about 2% and Shanghai was also up over 1%.

The European equities opened in the green and are currently trading over 1% up. DAX has surged by 1.88%.

On the sectoral front, the CD and FMCG indices managed to hold their morning gains by closing time. On the other hand, Consumer Goods and Pharma lost 1.64% and 1.34% respectively.

Among the Sensex stocks, Tata Power gained over 2% on news that the power companies that import coal will be allowed to hike their tariffs by Re 1 per unit. Of the other stocks, Bajaj Auto gained 1.85%. HUL, GAIL India and Coal India were also up by 1% each.

BEML tanked 2.5% by the day's end. Earlier, the CBI suspended the company's chairman, VRS Natarajan, for his alleged connection with the Tatra case. The stock fell as low as Rs 371.75 or about 3.5% when the news hit the markets.

The shares of BPCL and Videocon surged today as both the companies reported discovering gas reserves in Mozembique. BPCL closed up by 1.2%, while Videocon gained 3.21%.

Around afternoon, there was also a rumour in the markets that Bharat Forge is to acquire a stake in Shanthi Gears. Shanthi Gears' scrip surged on the back of this. However, after both the companies came in with a clarification denying the same, the company's shares lost most of their morning gains.

Suzlon Energy gained over 1% as its bondholders gave the company a 45-day extension to repay its FCCB obligations. The company is in a pact to raise about USD 300 million to repay the debt, which is maturing by June 2012.

Overall, the market sentiment for the entire day was positive. On the Sensex, 18 stocks declined, while overall 46% shares declined in value.

The markets will watch the IIP data tomorrow. In light of the negative news inflows from S&P and Standard Chartered, we still ask our readers to be very cautious while investing in the current markets.