Markets Close In Red, BHEL Top Gainer

Indian equity after last weeks rally, have started this week on a very cautious note. The 30 share BSE Sensex was down 0.41% to 18675 while the 50 share Nifty index on NSE was down 0.38% to 5669. Both the indices had shown some recovery by afternoon but tanked again over the reports that Greece has larger than expected budget shortfall.

In the Asian markets, Japanese Nikkei and Chinese Shanghai were down over 0.3% as both the countries are now indulged in the verbal war over the group of islands known as the Diaoyu in China and Senkaku in Japan. Hang Seng was also down 0.2%.

In Europe, the market have again lost ground over the report saying Greece must close wider than expected shortfall in the budget to meet the requirements from international lenders. FTSE and DAX are down over 0.6% each, CAC has lost over 1.31% at this time of the day.

Global credit rating agency S&P has downgraded its 2012 economic outlook for the Asia Pacific region. For India it has said that GDP growth would be 5.5% while that for China would be 7.5%. It has said that the slowdown in China, troubles in Euro Zone and Fragile global economy will hurt these economies.

By closing, the power index was up 1.8% as the government, most probably prepares a debt restructuring package to the State electricity boards (SEBs). Realty index which had jumped by over 3% by afternoon lost most of the gains by end of the trade. The realty players will benefit over the government’s decision on FDI In retail which will increase the demand for the commercial properties. Capital Goods index managed to hold the gains by closing. Oil and Gas index was the top loser by the end of the day. The index remained under pressure for the whole day. As the investors look to take more risks, defensive FMCG index was down by 1.45%.

Among the Sensex stocks total 17 stocks ended the day in red. Capital goods major, BHEL gained 6.41% on the hopes that the debt restructuring of SEBs would help to expand its order book. Jindal steel was bought by the investors on lower valuation. Shares of M&M and Maruti were up 3% each. Labor hit Maruti Suzuki has gained as it is expecting to launch a new car next month. Pharma Company DRL was also up 1.5% today. Shares of Tata Power, which were trading up about 4%, lost all the gains over reports that Bumi PLC has started investigation of Bumi Resources in Indonesia over financing irregularities. The housing loan giant, HDFC by closing was down 2.5%. FMCG major ITC was dumped as the stock has become expensive. HUL was also down on the similar concern. Shares of PSU Company’s i.e. ONGC, NTPC, Gail India, Coal India etc were in the red zone.

Among the other shares, Lanco infra was the top gainer as it will benefit from the governments decision on SEBs. Other power stocks such as Adani Power, Torrent Power, REC, JP Power, etc were also trading with gains. Shares of Suzlon energy were also up 7%. Oberai realty also gained 9.5% today. GVK Power and Infra surged by 6% over the decision of Mumbai Airport to hike the tariff by 660%.

Overall, the health of the market remained positive as 55% of total traded stocks advanced while 41% shown decline.

As the liquidity in the markets remains intact we expect that the market may not remain under pressure this week. As the most brokerage houses raise the index target we expect market to remain positive in the week.