Sensex hits lowest since Jan; DLF is the biggest loser

After plunging to a near-five month low, the markets have reversed some of their losses. Both the Sensex and the Nifty are down 0.7 percent. The BSE Sensex, the barometer of the Indian economy, is trading at 15,849, down 115 points and up 101 points from the day’s low. The S&P CNX Nifty is trading down 37 points to 4,804.

The recovery in the markets could be attributed to the statement that Subir Gokarn told CNBC TV-18 that the Reserve Bank of India (RBI) has some room to reduce policy rates following a moderate core inflation and soft global oil prices. The Reserve Bank of India will announce its mid-quarter policy review on 18 June.

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All the BSE sectoral indices are in the red, led by a steep fall in consumer durables and realty which are down more than 2 percent. The market breadth is negative. On the BSE, 1,407 stocks declined while 760 advanced. Among the 30-share Sensex pack, 28 are in red. DLF is the biggest loser with a fall of 4.5 percent followed by Gail and Bajaj Auto.

However, Manoj Singla, MD and Co-Head Product, Religare Capital Markets, warns that the market is showing signs of falling below December lows in a global correction. “We are telling investors to start bottom-fishing in some of the names, especially the interest rate sensitives. Having said that I think one would need to have patience, because definitely the economy is slowing down and things don’t look good fundamentally at least for the short-term”, he told CNBC TV-18.

On the other hand, Hemant Thukral of Aditya Birla Money, says that if Nifty holds 4,750 it can go back to 4,900. Currently, the market is approaching a very crucial support zone.

Stock specific news :

•Future Capital Holdings is up 8 percent at Rs 147.65 on reports that US-based private equity firm Warburg incus is likely to pick up a majority stake in financial services firm.

•Indraprastha Gas extended Friday’s gains as the stock rose 2.77 percent after the Delhi High Court had pronounced the judgement on 1 June 2012 in favor of the company that the Petroleum and Natural Gas Regulatory Board does not have the authority to fix tariffs.

•Cairn India fell 5.5 percent to Rs 298.95 as crude futures fell for the fifth straight day today, 4 June 2012, its lowest level in almost eight months on signs of an economic slowdown in the US and China.

•Bajaj Auto declined 2.5 percent on reporting poor sales figures for May 2012. Its sales in May declined 2% year-on-year to 3,52,219 units as commercial vehicle sales tumbled and exports to Sri Lanka continued to be hit.

•Oil marketing companies are trading higher. BPCL and HPCL are up 1.5-2 percent.