Markets Shrug Off GDP Growth, Watch For Jackson Hole

The Indian market opened trades on a negative note today. Despite some attempt at recovery following the announcement of the GDP number, the day's trades ended in the red. The Sensex and Nifty closed 0.92% and 1.06% down respectively.

All the sectoral indices closed down today except for Healthcare, which was only marginally up by 0.01%. Metals, Power and Oil & Gas were the worst performers, plunging by over 1.3%. Other indices like Auto, IT and FMCG also had a tough time, closing in the deep red.

The GDP figure for Jun 2012 came in at 5.5% (stood at 8% in the similar period last year), beating the street’s expectations that were anywhere in the range of 4.9%-5.3%. Despite a weakened economic environment, the numbers have still come in higher by 20 bps on a sequential basis (Mar 2012 quarter GDP stood at 5.3%).

Earlier, the European markets had opened on a negative note. At present, though, they are trading marginally in gains. Major indices like FTSE, CAC and DAX are trading higher in the range of 0.20%-0.7%. 

Dow Jones Futures is currently trading higher by 37 points or 0.28% at 13019, indicating a positive sentiment in the US markets.

Investors are keenly tracking the developments in the world markets, which would react to the two-day meet at Jackson Hole, where central bankers and finance ministers from around the globe will congregate to discuss economic measures.

Back home, Hero MotoCorp was the leading index loser, down by 3.73% at Rs 1757. Credit Suisse downgraded the stock to ‘neutral’ from ‘overweight’, and also reduced its target price. The Metals index plunged, with stocks like Hindalco and Sterlite Industries seeing losses of 2.07% and 1.99% respectively. Other stocks like BHEL, Coal India, TCS, ICICI Bank and RIL closed lower in the range of 1.7%-3%, while GAIL India, Tata Power, HDFC Bank, etc. closed marginally negative.

On the other hand, Cipla, which closed higher by 1.33% at Rs 377, was the leading index gainer. HDFC, Bharti Airtel, SBI and ONGC were others that ended the day in the green.

We expect the markets to remain volatile for next week. As already mentioned, investors and traders all over the world would be closely watching the two-day Jackson Hole meet (today and tomorrow), and the markets would react accordingly on Monday morning. Any signs from the leaders with regard to measures for reviving the global economies would definitely be considered as a positive, and vice versa.