Sunday, June 6, 2010

Sensex joins global selloff, RCom bucks trend

The Dalal Street opened gap down amid global sell off in early trade today. The Sensex and Nifty fell more than 2 per cent on reports of a slower than expected hiring in the US and concerns about Hungarian economy. Global cues have turned negative as markets across the US, Europe and Asia have tumbled.

The Sensex was down 358 points and trading at 16,759 while the Nifty managed to stay above the psychological 5,000 mark though still losing 111 points at 10.40 am today. The Nifty had closed half a per cent up on Friday at 5,135. The Sensex closed at 17,117.

Among the sectoral indices the high beta metal and realty space led the losses - both down by close to 4 per cent. None of the sectors were in green. The broader markets were faring better but only marginally with both the BSE small cap and midcap shedding close to 1.7 per cent. The breadth of the market was extremely negative with only 22 per cent stocks advancing on the BSE.

Among the Sensex stocks, Reliance Communications gained adding 1.46 per cent after its board gave a go ahead to sell 26 per cent stake. RCom shares have risen sharply over the past few sessions on reports that RCom has started talks with some foreign telcos, including merger talks with MTN of Africa and UAE's Etisalat for offloading part of its stake to finance future expansion plans such as the rollout of 3G mobile services. There are also media reports that RCom is in informal talks with the US telecom giant AT&T to sell its minority stake.

ONGC was up 0.10 per cent. Among the top losers were DLF and Hindalco - both down 5 per cent. Sterlite Industries, Tata Motors and Tata Steel were the other major losers.

Among the midcaps, JM Financial lost 5.6 per cent while REI Agro gained 13.6 per cent. June 8 is the record date for rights issue eligibility.

Among the small cap stocks, Mastek gained 9.5 per cent. The company is eyeing an acquisition in N America. It is likely to spend up to USD $ 50 million for acquisitions. Himadri Chemicals and Bajaj Hindustan Sugar were the top losers.

An EGoM (Empowered group of ministers) meet on fuel price deregulation is slated today and petrol and diesel prices may go up by Rs.3-3.5/litre.

Asian markets were all trading in the red on the back of global cues. The Nikkei 225 in Japan was down 3.5 per cent trading at 9,551 while the South Korean Kospi was down 1.81 per cent. The Chinese markets were down too with the Shanghai Composite down 2.09 per cent at 2,500 and the Shenzen 300 shedding 2.22 per cent. The Straits Times index in Singapore was down 2 per cent.

On Friday, the Dow lost 323 points or 3.2 per cent to close below 10,000. It was the lowest finish since February and the third-worst slide of the year.
According to the US employment report for May 431,000 jobs were added but 411,000 jobs were attributed to government hiring for census. The private sector added 41,000 jobs in May vs 218,000 in April. The news didn’t go down well with investors and indicated that the economic recovery was yet to gain momentum.

Euro was back at a 4 year low breaking 1.20/$ for the first time since March 2006.


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