Volatile Trading Day Ends Negative

The Indian markets closed on flat note after witnessing see-saw trades today. The growth in the earnings of SBI did not help bolster sentiments, which instead reacted negatively to the bank's increased bad loans. The underlining statement is that the increased bad loans could get more serious, as the country is going through a lower industrial production and higher interest rate regime.

Among the global indices, the Asian indices traded negative today and ended in losses. Hang Seng and Nikkei were down by over 0.5% each, while Shanghai closed negative by 0.24%. Meanwhile, the Chinese data has disappointed the markets again. The country’s trade surplus declined sharply to USD 25.1 billion in Jul 2012 against an expected USD 35.2 billion. Its exports managed to grow by merely 1% against an expected 8%.

European indices are trading still weaker after a negative opening, with even FTSE joining the rank of losers at the moment. The European markets are concerned about whether the ECB will be able to help the European economy surface from the current mess.

On the sectoral indices front, IT and Teck managed to close with 1% gains each, while FMCG, Oil & Gas and Metals also remained in the green zone. All the others were down, with Auto and CD taking a significant beating.

Among the Sensex stocks, SBI lost over 4% and was the top loser after reporting increased bad loans. Sun Pharma also lost marginally after the company reported a decline in its standalone business. Tata Motors finished 3% down following its Jun quarter results declaration yesterday. Hero MotoCorp, Tata Steel and Coal India also lost over 1% each. HUL, on the other hand, ended the day with 2% gains. Sterlite Industries, Maruti, TCS, Infosys, NTPC and Wipro were also up 1% each.

Among the other shares, Jain Irrigation gained 5% up by day's end. Both Tech Mahindra and IGL also gained over 4%. The shares of Wockhardt have gone up further by 3% after the company reported hefty profits this week. However, the Jun 2012 quarter losses reported by Ranbaxy Labs saw its scrip going down by 3% today. In other big losers, JP Infratech was down by 7% and PFC lost 4%.

The advance-decline ratio on the BSE remained positive for today. 41% of stocks advanced while 55% stocks declined, and 4% remained unchanged.

In this week, the market saw gains of about 2%, tiding over the weak IIP growth, higher inflation and mostly disappointing quarterly results. This growth has been on hopes of the reforms that the government could take. Overall, we feel the markets still look quite sensitive and the gains do not look firm.