After much drama at 21000, Sensex gives up all gains to end in red

15:30 pm Indian equity markets gave up all its gains to close in the red on profit booking by investors.Experts believe global liquidity that is driving the market towards its record high, but the Nifty may see sharp correction after hitting 6300 level**.**

The S&P BSE Sensex witnessed a sharp upmove and surged past its crucial psychological level of 21,000 for first time since November 2010 in trade on Thursday morning but closed the day 60 points lower at 20707 while NSE Nifty closed 14 points lower at 6164.

It was on January 8, 2008, that the index crossed the 21,000-mark for the first time. The all-time closing high for Sensex is 21,004, which it hit on November 5, 2010, while its intraday high is 21,228.

BSE capital goods index ended up 1.1 percent - top sectoral gainer; BSE IT fell 1.8 percent and is among the worst performing sectoral indices.Among blue chip companies, Reliance Industries fell 1.37 percent after gaining as much as 1.6 percent earlier in the day. Tata Consultancy Services fell 2.5 percent, while Wipro lost 4.39 percent.

Analysts says markets have been in a consolidation phase since 2008 and unless there is a broad-based rally, equity markets will continue to be patchy.

However, according to a Credit Suisse report, there are three potent forces coming together that can drive

speculative excess:

(1) the aftermath of sharp divergence in stock performance (discomfort holding winners when losers are so cheap);

(2) easy global liquidity (taper pushed by a few months);

(3) the “hope” of a Narendra Modi-led NDA winning in 2014

National elections in India are due by May 2014. Historical data suggests that the last two elections in 2004 and 2009 saw gap moves (19%/18% down/up respectively) as results surprised.

Harendra Kumar of Elara Capital warned that the current rally does not imply abull market but a trading market ahead of elections.

And it will remain a trading market at least for the next six months, he told CNBC-TV18. According to Kumar, the improving macros are from the external environment and locally, the macro is quite tepid but the sentiment is definitely improving in the run up to the elections. Since the liquidity withdrawal seems to have been postponed till March, market should be okay till then.

Nizam Idris of Macquarie feels that the delayed taper of monthly asset purchase by the US Federal Reserve will be the key driver for Indian currency market. The taper may not happen till March 2014, which is giving the Reserve Bank (RBI) a window to accumulate dollars for shoring up its reserves to $300 billion, he told CNBC-TV18. So, the rupee may find support at 60/USD mark going forward. Currently the rupee is trading at 61.4 against the US dollar.

Sensex gives up gains as indices start consolidating

14:00 The benchmark indices gave up all the early gains and entered the red territory dragged down by heavyweights such as Reliance Industries and Axis Bank.

The Bank Nifty which had crossed the 11,000 market also fell to 10,290 as banks started losing ground.

Ashish Chaturmohta of Fortune Equity Brokers speaking on CNBC TV18, however, ruled out any major down side in the market as the indices are consolidating at these levels.

The Sensex was up just 33 points at 20794, while Nifty was up 5 points at 6184

At 2:05 pm, Reliance Industries was down 1 percent at and Axis Bank was down 0.6 percent.

13:00 Indian markets have come off its intra-day high as investors continue to book profits.

At 1:03 pm, the BSE Sensex was up 127 points at 20895 while Nifty was up 35 points at 6213.

IT stocks witnessed the maximum profit booking. HCL Tech was down 3 percent, Wipro down 2 percent, TCS was down 1 percent even as the BSE IT index is still up 7.2 percent so far in October.

Deven Choksey, Kr Choksey Shares & Sec is advising clients to book some profits now but not to exit the market completely. At the same time, he feels, investors can look at select stocks where the valuation looks attractive and where there is a good amount of margin safety on the downside.

Vineet Bhatnagar, MD, PhillipCapital, however is confident that the Nifty will breach 6300 levels and head towards the earlier high of 6357 on the back of global cues.

Sensex hitting 21000 doesn’t mean it’s a bull market

11:48 am The Sensex and Nifty pulled back from their peaks as mild profit booking set in at the higher levels. However, the markets maintained its momentum on continued foreign institutional interest and global cues.

Asian equity markets rose after data showed Chinese manufacturing sector witnessed the fastest expansion in seven months in October on strong new orders.

The Sensex wasup 187 points at 20955, while Nifty was up 55 points at 6230.

However, analysts are cautioning against any exuberance over the equities rally.

Elara Capital’s Harendra Kumar told CNBC TV18 that the market hitting new highs rally does not necessarily mean that it is a bull market.

“It is a trading market in the run-up to the elections,” he said.

ICICI Securities’ MD and CEO, Anup Bagchi, does not see a significant upmove to the market going forward. With concerns regarding the pace of the movement upwards, the Nifty may top around 6,200-6,300 levels, he told CNBC-TV18.

Bagchi does not see headline interest rates coming down in the Reserve Bank’s (RBI) October 29 meet. Inflation is still high and the central bank will focus on bringing liquidity to the system, but not cut interest rates, he added.

He believes that liquidity is the biggest driver of midcaps currently. He is positive on Shree Cement and Havells India in the segment. He also prefers IT and cement stocks.

Foreign funds have bought $1.7 billion in Indian equities so far this month, taking their total purchases for the year to $15.35 billion.

However, technical analyst Sudarshan Sukhani feels buying at current levels is not a good idea. “If you’re long on the Bank Nifty then stay long. For the Nifty, we had a view that it’s choppy - but it is not choppy. But you do nothing for the Nifty. Whatever long positions you have, you keep them. This is a time to have a lot of fun, look at 21000 Sensex but don’t take new positions.”

10 amSensex crosses 21000, but not a time to enter market

The Sensex hit the psychological mark of 21,000 today after almost three years n continued inflow from foreign institutional investors. The milestone was reached with Diwali less than two weeks away.Experts believe global liquidity that is driving the market towards its record high, but the Nifty may see sharp correction after hitting 6300 level.

The Sensex had closed above the 21,000 mark for the first time on November 5, 2010, which incidentally was Diwali.

However, it was on January 8, 2008, that the index crossed the 21,000 mark for the first time, hitting 21,078 in intraday trade, but closed below 21,000 mark at 20,873. Sensex had hit its highest intra-day value of 21,206 on January 10, 2008.

Sudarshan Sukhani advised investors on CNBC-TV 18 that this is not a day to take the trade ahead. “Please don’t enter the market now, just step aside and watch,” he said.

However, Deven Choksey of KR Choksey Securities advised select profit booking and select investing. “Rotation game continues in the market,” he told the TV channel.

Eicher Motors, Motherson Sumi and Infosys are among the stocks that touched their 52-week high today.

Ambuja Cements fell 1.27 percent and ACC is also in red after the cement makers report lower-than-expected July-September earnings.

Shares in Jet Airways dropped as much as 6.4 percent tracking record quarterly loss in the September quarter. Jet, India’s second-biggest carrier by domestic market share, reported a net loss of Rs 891 crore for the three months ended September 30, compared with a net loss of Rs. 99.7 crore a year earlier.

Sudarshan Sukhani does not see any value in the stock and has advised investors to get out as soon as possible.

BSE IT index is trading flat; Tech Mahindra rose 1 percent, while Infosys touched its 52-week high today.

FIIs continued to be net buyers in the market for a 14th session. They were provisional buyers of $104.7 million on Wednesday, exchange data showed.

Domestic institutional investors were net sellers worth Rs 545.57 crore.

Globally, Asian markets were down on profit booking led by Japan’s Nikkei on concerns over China’s economic outlook.

However, dtrong new orders drove the fastest expansion in China’s manufacturing sector in seven months in October, a preliminary survey showed on Thursday, more evidence that the economy is stabilising although a strong rebound remains elusive.The flash PMI figure, the earliest reading of China’s monthly economic performance, offers some positive news after disappointing export figures and September’s manufacturing PMI, which had shown weak domestic demand.

9.40 pm: Sensex, Niftyat highest levels since Nov 2010

From a flat start this morning, the Sensex has gained strength and is now trading well over 200 points.

Sensex touches 21000 with 29 components in green; the benchmark index has touched this level for the first time since Nov. 2010

The bank Nifty is trading at one-month high. It has hit 11,000.

At 9. 43 am, the BSE Sensex is at 21008.89, up 241.01 points or 1.16 percent. The Nifty is at

6244.85, up 66.50 points or 1.08 percent.

9. 20 am: The Indian markets opened on a flat note yet again.

The BSE Sensex opened at 20763, up 0.01 percent; while theNifty opened at 6175, up 0.03 percent.

The markets remain cautious ahead of earnings from non-information technology companies and the Reserve Bank of India’s policy review on 29 October.

[caption id=“attachment_1074773” align=“alignright” width=“380”] Brokers monitor share prices while trading at a brokerage firm in Mumbai. Reuters[/caption]

Sesa Sterlite, Hindalco, HDFC, Tata Power and ONGC are top gainers in the Sensex. Among the losers in the Sensex are Coal India, Dr Reddy’s Lab, Sun Pharma, NTPC and TCS.

The rupee is opened at 61.64 per dollar. It closed at 61.59/60 yesterday.

The dollar edged higher this morning, butwas hemmed in its recent range as investors remain cautious about liquidity conditions in China. According to Himanshu Arora of Religare,the dollar is expected to witness upside amid month end dollar demand that may emerge from oil marketing companies. “Worse than expected payroll data from the US may also support the dollar,” he adds.

He says any correction in domestic equities is likely to keep the rupee pressure in the short term. “The range for the day is seen between 61.40-62.10/USD.”

Globally,Asian shares fall in volatile trade as a further spike in Chinese money-market rates tempers the effect of a survey showing a pick-up in manufacturing.

In the US, stocksended lower, with the S&P 500 snapping a four-day streak of record highs, following weakness in global equities and a mixed bag of earnings reports. The benchmark treasury yields fell to their lowest in three months after the weaker jobs data reinforced expectations that the fed is unlikely to taper anytime soon. The CBOE volatility index climbed to close above 13.

Stocks in news:

Jet Airways is the biggest loser in the BSE Sensex falling around 4 percentafter the company posted a record quarterly loss of Rs 999 crore in Sept quarter.

BSE realty index rises 1.4 percent - top sectoral gainer; Phoenix Mills and DLF up over 2 percent

Telecom stocks such are all up after the telecom regulator stuck to its recommendations for steep cuts in the floor price of spectrum for upcoming auctions as well as on spectrum refarming, among others, leaving theTelecom Commissionto decide on proposals that have been largely applauded by the industry. Bharti Airtel is up 1.65 percent, Idea Cellular is up 0.94 percent.