Meeting deferment spooks market, breadth turns negative

A highly volatile trading day ended with the market closing near its previous day close. BSE Sensex closed the day at 18,512.77 points or 16 points lower. NSE Nifty closed the day at 5541.25 down 9.85.

[caption id=“attachment_7501” align=“alignleft” width=“380” caption=“Indian markets tanked towards the end on Tuesday over a petroleum ministry announcement on oil prices. Sam Mircovich/Reuters”] [/caption]

Market’s breadth for most of the day was positive, with the BSE Sensex trading over 150 points by afternoon. Oil ministry sources were then quoted as saying that they have recommended a Rs 4 per litre hike in diesel price and have also recommended hike in prices of kerosene and LPG. Oil and manufacturing stocks started moving up and were trading at the high of the day around 2.30 pm. It was then that there was an announcement of a deferment of the meeting of Empowered Group of Ministers (EGoM). All hell broke lose, BSE Sensex lost nearly 250 points in a span of 30 minutes. Oil refining and marketing companies lost 4-5% of their value within minutes. All three public sector oil companies HPCL, BPCL and IOC closed the day below the previous day low.

Among the other news for the day were results of HDFC, NTPC and Hindalco. HDFC posted a net profit of Rs 1,142 crore against Rs 926 crore for the quarter ended March 31, 2011. Its income grew from Rs 2,899 crore to Rs 3,785 crore. HDFC closed the day at Rs 660.60, down 0.6%. In the case of NTPC net profit increased by 37.8 percent to Rs 2780 crore while its income grew by 25.6 percent to Rs 15520 crore. NTPC revived the market to some extent by jumping 4.6% to Rs 180.85. Hindalco fell from the high of the day of Rs 207.50 to close the day at Rs 202.70 after it announced a profit of Rs 708.37 crore against Rs 663.92 crore for the previous quarter last year. Sales for the period increased from Rs 5474.3 crore to Rs 6951.53 crore.

Hindustan Unilever continued to see buying interest a day after its results were announced. The stock was the best performing among the index stocks, trading higher by 4.46% to Rs 297.15.

SKS Microfinance saw value buying helping it close the day 10% higher at Rs 298.60. The company’s management said it expects pain to continue for the next two quarters.

Market breadth a sign of the strength of the market turned negative with 1370 stocks advancing, 1410 declining and 151 remaining unchanged.