Markets Erase Gains, End Flat

The Indian markets opened on a positive note today, with a spike in the beginning of the day. However, the markets inched lower as the day passed by and ended close to yesterday’s closing. The intraday movement of the markets saw the Sensex and Nifty touching a 20- and 23-month high respectively. The Sensex ended the day lower by 14.41 points or 0.12% at 19387.14 and Nifty was down 10.10 points or 0.17% at 5898.80.

Considering a positive global sentiment and the higher opening in Europe, the downward movement in the domestic markets is likely to have been caused by the adjournment of the Lok Sabha over the Walmart lobbying report. The sag also resulted out of dampened hopes over the passage of the Banking Laws (Amendment) Bill. 

The market breadth was negative today, with 1154 (37.7%) advances and 1766 (57.69%) declines.

The weakness in the markets is evident from the movement observed in midcaps and smallcaps. The BSE midcap and smallcap indices ended the day lower by 1.15% and 0.91% respectively. Only 1 of the 13 sectoral indices ended the day positive. The BSE FMCG index saw an appreciation of 1% today. The Realty, Power and Teck sectors took the largest losses, down by 1.96%, 1.05% and 0.92% respectively.

The top gainers included Jindal Steel, Bajaj Auto and HUL, which went up by 2.54%, 2.28% and 2.08% respectively. The top losers included BHEL, Hindalco and NTPC which saw a downward movement of 2.59%, 2.40% and 1.66% respectively.

The Hexaware Technologies counter recently saw a downfall after the company revised its guidance for Q42012. Post this downward revision, the company has been downgraded by Macquarie and Nomura, which further impacted its stock price. The scrip ended the day lower by 2.55%.

Due to disappointment over the banking bill not being passed due to the adjournment of the Lok Sabha, banking stocks saw a high amount of volatility and a subsequent move lower. The stock prices of banks were under significant pressure today and saw negative movement, as seen in the table below.

We expect the markets to closely track developments in the Parliament, IIP data for the month of October and inflation figures for the month of November through this week.