Weakness in global markets trickled onto domestic markets as they closed in the red. Both the Sensex and the Nifty closed down 0.74 and 0.79 percent. The BSE Sensex, the barometer of the Indian economy, closed down 129 points to 17,391 while the S&P CNX Nifty closed below the 5,300 level at 5,275. The market breadth was negative. On the BSE, 1,767 stocks declined while 1,093 advanced.
Among sectoral indices, all 13 closed in the red. The biggest loser was the metals index (1.5 percent) followed by power and consumer durables. In the 30-share Sensex pack, only three advanced. TCS, Hindalco and Dr Reddy closed in the green. The top losers were Hero Moto Corp (-2.6 percent), Jindal Steel (-2.56 percent), Bajaj Auto (-2.3 percent).
The Indian rupee also fell to an over one-week low on Monday, dragged by weakness in the euro after US jobs data showed tepid growth.
The next big trigger for the markets is expected to be the June 2012 quarter earnings, which kick off with HDFC on11th July and Infosys/TCS on 12 July.
However, revenue growth in Q1FY13 is expected to drop to around 14 percent from 17.5 percent in the June 2012 quarter, due to slowdown in economic activity and gross fixed investments. Operating profit margins are projected to decline by 100-150 bps on a YoY basis to around 19-20 percent, but remain flat compared to Q4 FY12. Sectors with high operating leverage such as hotel and airlines to see pressure on margins due to seasonal weakness, said Mukesh Agarwal, President of CRISIL Research.
There are certain experts who are bullish on the markets. According to Hemant Thukral, Aditya Birla Money, says that while the markets are slightly over bought in the short term, traders can look to buy at lower levels because the Nifty is headed to 5,380-5,400 levels in the next few sessions.
Even Ambit Capital is positive on the Sensex as he expects it to reach 18,000-19,000 by end of this fiscal. He further adds that that as we heard towards the Federal Open Market Committees (FOMC) 1 August announcement, investors may find some zest coming back into global markets.
Stock specific news:
•TVS Motors galloped 7 percent after business newspaper Mint reported that the two-wheeler maker is in talks with German auto maker BMW AG's unit, BMW Motorrad, to source technological know-how to develop high-end motorcycles.
•Indraprastha Gas gained 1.8 percent on reports that the company raised prices of compressed natural gas (CNG) by Rs 2.90 per kg on Friday to offset the impact of the rupee's fall.
•United Spirits declined 4 percent on the exchange today. According to CNBC TV-18, the company is working on a strategy to monetise its non-core assets in order to reduce its debt.
(with inputs from Reuters)
Updated Date: Dec 20, 2014 18:36 PM