MUMBAI: The Sensex opened flat at 8,447, and moved up after the Asian markets bounced from their lows. Profit-taking at higher levels saw the index shed gains in noon deals, and dropped to a low of 8,442 in early noon deals. Big buying towards the close pulled up the index once again, and the Sensex zoomed to a high of 8,988 - an intra-day swing of nearly 550 points. The Sensex finally closed with a huge gain of 464 points (5.49%) at 8,915.
All the sectoral indices, except the BSE Realty index, closed with gains. The BSE Power index zoomed over 6%. The BSE Oil & Gas and Capital Goods indices added over 5%. Market breath was bearish - out of over 2,565 scrips traded, nearly 1,300 declined.
Reliance Infra and RCom zoomed 14% to Rs 485 and Rs 207, respectively. Sterlite added 9% at Rs 219.
SBI zoomed over 8% to Rs 1,183. L&T added 7% at Rs 760. Reliance moved up over 6% to Rs 1,127. HDFC, NTPC, TCS, BHEL and ONGC also closed with sharp gains.
DLF slipped 3% to Rs 198. Jaiprakash, ACC and Tata Power also declined.
Total market turnover (BSE+NSE) was Rs 60,735 crore. Reliance was the most active counter on the BSE with a turnover of Rs 344 crore followed by Reliance Capital (Rs 184 crore) and ICICI Bank (Rs 177 crore).
Liquidity Picture
FIIs net sellers of Rs 52,821 crore since beginning of 2008
FIIs net sellers for seven months in a row
FIIs sold shares worth Rs 42,463 crore in the last seven months
Mutual funds net buyers of Rs 12,894 crore on YTD basis
Mutual funds net sellers of Rs 1,403 crore in Novermber
Mutual funds net sellers after two months
Valuations (One-year forward PE multiple)
Sensex 9.36x
Nikkei 12.36x
Dow Jones 9.51x
Taiwan Weighted 9.09x
Hang Seng 8.71x
Kospi 7.90x
Seeking to allay concerns about slowdown in the country in view of global meltdown, Prime Minister Manmohan Singh today said no effort would be spared to "neutralise" to the "maximum" its adverse impact on India and asserted that the economy would grow at 8%.
Adi Godrej, chairman, Godrej Group, said no one would close factories if cutting prices can solve the problem. "But how will cutting prices solve the problem? Availability of consumer loans is very tough...so, liquidity must improve... CRR and SLR must be cut and interest rate must be brought down. If inflation comes to low single digits, obviously, interest rate must come down to around 8%. Now, it is much better to work on inflationary expectations than on inflation numbers. If you look at inflation on a month-on-month basis, it is down. There is deflation compared to last month... so, I think one must work on inflationary expectations and not on the year-ago numbers. Once that is taken cognisance of, the government needs to announce fiscal packages."
S Ramesh, chief operating officer, Kotak Investment Banking, said many promoters are going through a liquidity crunch. "It's a question of how much money they have, and how they will get money to mop up stocks. That seems to be a bit of a challenge in the short-run.. promoters are using a combination of buy backs or creeping acquisitions. One has seen a lot of action in this space..."
Siddharth Bhamre of Angel Broking said this is clearly a sell-on-rise market. "In this downtrend market, we are seeing markets going up but at the end of the day, you are seeing prices quite lower. So, clearly, it’s a sell on rise market.... We expect October lows to be hit but we are not expecting very significant downside from the October lows. What we are recommending to traders who have formed positional longs from 3000+ levels is to cover their short positions at 2,300-2,400 and not form aggressive short positions at this point of time." |
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