Advance GDP Numbers Dampen Markets

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In a seesaw trade, the Bombay Stock Exchange benchmark index Sensex on Monday ended flat after rebounding from the day's deep lows it hit on lower-than- expected growth projection.

Weighed down by lower Asian advices, the Sensex opened 95 points down and hit a low of 15,651.99 on all-round heavy selling triggered by the 7.2 per cent GDP advance estimate, but managed to close in the green with a meagre 19.96 points up at 15,935.61, on strong European advices.

The index shuttled between 16,061.41 and 15,651.99 intraday and yet failed to regain psychological 16,000-mark for the second day in a row, as sellers outnumbered buyers in high beta counters.

However, strong European equities with higher commodity prices boosted energy and mining shares and also recovery in financial services which slipped 6 per cent last week, assisted the market rally in the later part of the day to close in the green for the second day in a row after last week's bloodbath.

Angel Broking vice-president for research Sarabjit Kour Nangra said, "the market was driven down by GDP numbers as it somewhat acted as a dampener on the investor sentiment.

Although the market was flatish in the morning, negative sentiment brought in by the GDP numbers pulled it down."

The broader 50-issue Nifty of the National Stock Exchange too ended with meagre changes at 4,760.40 gaining 3.15 points, after swaying between 4,799.05 and 4,675.40 points. The index opened 26 points down following poor Asian cues.

Following the world markets, last Friday, the Sensex had tumbled by 434 points, while on Saturday, on special trading, it was ended higher by nearly 125 points on a better than expected recovery on the Wall Street overnight.

Marketmen said funds were so heavily selling, which got accentuated after the lower-than-expected GDP advance estimate at 7.2 per cent. Though this bettered the market expectation of 7 per cent, it was lower than the government's and RBI's estimates, hence the market's negative reaction.

But the strong European sentiment helped the market towards the fag-end and helped recover the huge fall post-the GDP numbers.

Bonanza Portfolio assistant vice-president Avinash Gupta also agreed that it was the European cues that helped the market rebound, saying "the strong opening of European markets induced short covering which pulled the markets up."

Nangra of Angel Broking echoed similar views, saying since the domestic markets are following global cues, a surge in the European markets brought about a bounce-back here too.

"But the main reason for the poor sentiment here is the absence of FIIs who are still keeping away from the domestic market," pointed out Nangra.

Asian indices ended narrowly mixed with a downward bias.

The Strait Times and Taiwan were marginally up, while Shanghai Hang Seng, Nikkei and Kospi finished with losses.

Ignoring the sovereign debt crisis in their homestead, European stocks opened strong today. The CAC was up by 1.32 per cent, the DAX by 1.10 per cent and the FTSE by 1.02 per cent.

From the BSE sectoral indices, the Metal was the top loser and plunged by 215.58 points or 1.38 per cent. Tata Steel dipped by 4.46 per cent, Hindalco by 3.75 per cent, Wipro by 1.74 per cent, JP Associates by 1.29 per cent, NTPC by 1.29 per cent, Tata Power by 1.21 per cent, ITC by 1.11 per cent and Tata Motors by 1.01 per cent.

However, the Sensex gainers pack was led by Bharti Airtel which firmed up by 2.70 per cent, RCom 2.21 per cent, ONGC 1.82 per cent, HUL 1.75 per cent, M&M 1.48 per cent, Sun Pharma 1.47 per cent and SBI by 1.14 per cent.

The market breadth remained negative with 1,444 counters losing ground against 1,329 that ending with gains on the BSE.

The total trading volume improved further to Rs 4,687.14 crore from Rs 4,503.13 crore on last Friday. Jubilant Food, listed today topped the list of highest traded securities with a turnover of Rs 655.17 crore followed by Tata Steel (Rs 257.74 crore), RIL (Rs 129.01 crore), SBI (Rs 115.20 crore) and Hindalco (Rs 106.65 crore).