Benchmarks make gap-down start on renewed Europe worries

The Indian equity bourses witnessed some recovery in the early trade after a gap-down start triggered by renewed concerns over euro zone debt crisis. Moreover, the US markets declined overnight lacking clarity on the European debt crisis plan while, most of the Asian equity indices were trading in the negative terrain too dampening the sentiments. Back home, BSE’s Sensex breached its crucial 5,650 mark on sustained selling by funds tracking weak trend in global markets. However, the sectors like public sector undertaking, healthcare and realty are providing some support to the index while, fast moving consumer goods, capital goods and metals remained under selling pressure and were mainly responsible for the Sensex’s decline. Index heavyweight Reliance Industries edged lower after the company refuted speculation that it is considering acquiring Valero Energy, Inc. Moreover, fall in L&T, ICICI Bank, Infosys, too dampened the market sentiments. The market breadth on the BSE was positive; there were 816 shares on the gaining side against 772 shares on the losing side while 80 shares remained unchanged.

The BSE Sensex opened at 17,540.55; about 164 points lower compared to its previous closing of 17,705.01, and has touched a high and a low of 17,661.78 and 17,537.06 respectively.

The index is currently trading at 17,632.70, down by 72.31 points or 0.41%. There were 11 stocks advancing against 19 declines on the index.

The overall market breadth has made a positive start with 48.92% stocks advancing against 46.28% declines. The broader indices were outperforming benchmarks; the BSE Mid cap and Small cap indices rose 0.20% and 0.16% respectively.

The top gaining sectoral indices on the BSE were, PSU up by 0.51%, HC up by 0.39%, Realty up by 0.35%, CD up by 0.23% and Power was up by 0.16%. While, FMCG down by 0.76%, CG down by 0.75%, Metal down by 0.55% and Bankex down by 0.06% were the only losers on the index.

The top gainers on the Sensex were Sun Pharma up by 1.93%, Wipro up by 1.57%, BHEL up by 1.13%, Tata Motors up by 0.88% and ONGC was up by 0.52%.

On the flip side, Sterlite Industries was down by 3.45%, L&T was down by 1.77%, ITC was down by 1.31%, ICICI Bank was down by 0.99% and Jindal Steel was down by 0.92% were the top losers on the Sensex.

Meanwhile, the Foreign Institutional Investors (FIIs) turned bullish after the two months of outflows in the month of October. According to the data available with the Securities and Exchange Board of India (SEBI), the FIIs have purchased stocks and debt securities worth a gross amount of Rs 58,483.40 crore and sold securities valued around Rs 57,470 crore, which means that a net inflow of Rs 1,014.30 crore.

This net inflow of Rs 1,000 crore indicates that the Indian capital market has seen an upward movement. However, in the last two months, foreign investors were seen investing in gold. The market experts are of the view that the FIIs will continue to invest money into developing nations.

On the same time, the 30-share Sensex increased by 8% or 1,351.04 points in month of October. During last trading session, the Bombay Stock Exchange (BSE) finished at 17,804.80, up 515.97 points from its last close, which is biggest one day gain from August 29, when it surged by 567.5 points.

In last two months, the FIIs have experienced an outflow. During August, FIIs pulled out around Rs 8,000 crore from the Indian stock and debt markets, which is highest monthly withdrawal since October 2008. Last month FIIs had withdrawn around Rs 1,866 crore.

Market experts are of the view that the heavy selling by the FIIs was on the back of current debt crises in the eurozone and weakness in the United States’ economy. During October, FIIs were optimistic on the debt market and invested around Rs 1,697.30 crore whereas FIIs sold around Rs 683 crore from the equity market in the same time.

In the current year, FIIs have invested around Rs 18,679 crore into stock and bond markets from Rs 1,79,674 crore in the whole of 2010. The number of FIIs registered with SEBI stood at Rs 1,749 till October 2011 whereas the number of Sub-FIIs was 6,058 in same month.

The S&P CNX Nifty opened at 5,278.60; about 48 points lower compared to its previous closing of 5,326.60, and has touched a high and a low of 5,310.85 and 5,275.50 respectively.

The index is currently trading at 5,302.60, down by 24.00 points or 0.45%. There were 16 stocks advancing against 34 declines on the index.

The top gainers of the Nifty were Sun Pharma up by 1.81%, Wipro up by 1.53%, BHEL up by 1.12%, PNB up by 1.01% and Tata Motors up by 0.96%.

Sterlite Industries down by 3.46%, L&T down by 1.91%, ITC down by 1.43%, ICICI Bank by 1.24% and Ambuja Cement was down by 1.22%, were the major losers on the index.

Asian equity markets were trading mostly in the red; Hang Seng was down 280.18 points or 1.41% to 19,584.69, Jakarta Composite was down 15.08 points or 0.40% to 3,775.77, KLSE Composite was down 7.86 points or 0.53% to 1,484.03, Nikkei 225 was down 97.86 points or 1.09% to 8,890.53 and Straits Times was down by 17.90 points or 0.63% to 2,837.87.

On the flip side, Shanghai Composite was up 0.24 points or 0.01% to 2,468.49, Seoul Composite was up 6.18 points or 0.32% to 1,915.21 and Taiwan Weighted was up by 23.22 points or 0.31% to 7,610.91.