Morning Note - Market Insight By Mansukh - 22nd July, 2011

On Thursday  21 July  2011,  Ignoring  the development  on the macro  font,  Indian  equity  markets extended  their  downwards  trend  for  the  second  consecutive  session  perturbed  by  the  earning's reported  by the corporate  giants  for Q1 today,  of which  most  turned  out to be disappointment. Meanwhile, giving some respite to the government, India's food inflation measured by wholesale price index (WPI) softened to 7.58% for week ended July 9 from 8.31% in the previous week. However, the investor's brushing aside the weekly inflation numbers seemed more apprehensive over the potential rate hike by the RBI in its upcoming monetary policy review in the coming week on the back of the clambering monthly inflation data.   Traders also remained wary ahead of an emergency summit of euro-zone leaders later in the day, with an agreement reached late on Wednesday between France and Germany on a second bailout package for Greece. The new bailout package is likely to include measures to cut the country's debt, lower interest rates and the participation of private investors holding Greek debt.  On the global front, US stocks closed slightly lower a day after the Dow Jones Industrial Average notched its biggest closing of the year as the oncoming debt ceiling deadline overshadowed  strong earnings from Apple Inc. European shares rose on Thursday, with banking stock gaining the most after German Chancellor Angela Merkel and French President Nicolas Sarkozy reached a joint position over a second bailout for Greece.

The BSE Sensex lost 77.66 points or 0.42% and settled at 18,424.72. The index touched a high and a low of 18,566.99 and 18,415.36 respectively. 9 stocks advanced against 21 declining ones on the index. The BSE Mid-cap index lost 0.39% while Small-cap index was down by 0.43%. On the BSE Sectoral front, IT up 0.18% and TECk up 0.13% were the only gainers. On the flip side, Consumer Durables down 2.19%, Realty down 1.43%, Bankex down 1.02%, Oil & Gas down 0.89% and Health Care down 0.70% were the top losers.

India VIX,a gauge for market's short term expectation of volatility lost 1.88% at 18.75 from its previous close of 19.11 on Wednesday. The S&P CNX Nifty lost 26.90 points or 0.48% to settle at 5,540.15. The index touched high and low of 5,578.90 and 5,532.70 respectively. 15 stocks advanced against 35 declining ones on the index. (Provisional)

Asian equity indices recovered from its initial downfall and finished the day's trade on a mixed note on Thursday as investors remained cautious and watched for progress in raising the US government debt limit and talks on Europe's debt crisis. Chinese Shanghai declined over a percent after a weak reading on China's HSBC Manufacturing Purchasing Managers Index renewed concerns that growth in the world's second largest economy may slow in the latter half of the year while, South Korean shares ended down about half a percent in the trade as uncertainty about the global economy and the euro zone's debt crisis hit manufacturing heavyweights such as shipbuilder Hyundai Heavy.