On Thursday 28 July 2011, Thursday proved not a different day for the Indian
markets in their series of decline, extending their downfall for yet another day and closing the July F&O series on a very disappointing note. The mood was somber since beginning, as the US markets plunged overnight and under their impression the Asian markets made a weak start. Due to the impasse in US regarding increasing the debt limit the mood of the whole global markets has turned cautious, investors are anxiously watching the outcome of the US parliament discussion. Back on the Dalal Street, the trade was likely to be volatile as it being the day of F&O series expiry, and after making a gap-down start the benchmark indices never showed a sign of recovery though the trade remained choppy but within a tight range for most part of the day, it was in the last half an hour of trade that the selling intensified and the BSE Sensex breached its crucial 18200 mark. Not only the rate sensitive sectors but the metal, IT, technology oil & gas all suffered sharp cuts for the day. From the rate sensitive sectors, Auto showed some resistance in the early trade but could not recover and closed lower by over half a percent. After RBI's rate hike, the Finance Minister Pranab Mukherjee has said that the Reserve Bank of India might hike policy rates again as inflation was unlikely to come down to a comfortable level this year, making the investors and the India Inc. nervous. He termed the action necessary even though it was hurting growth. Mukherjee further said that 50 basis points rate hike was intended to convey a 'strong signal' about the regulator's intention to curb inflation. The commodity stocks declined in tandem with their global counterparts as the stalling global growth will diminish the commodity demand.
The BSE Sensex lost 235.64 points or 1.28% and settled at 18,196.61. The index touched a high and a low of 18,327.85 and 18,188.88 respectively. 5 stocks advanced against 25 declining ones on the index (Provisional). The BSE Mid-cap index lost 0.93% while Small-cap index was down by 0.97%. On the BSE Sectoral front, FMCG up 0.90% was the only gainer. On the flip side, Metal down 2.51%, Realty down 2.16%, Oil & Gas down 1.72%, IT down 1.61% and Bankex down 1.48% were the top losers.
The trend of moderation of India's food inflation has continued yet another week, country's food inflation, measured by the wholesale price index (WPI), declined to its 20 month low level at 7.33% for the week ended July 16 from 7.58% in last week. This fall in food inflation was contributed by moderation in prices of pulses, milk, Fruits and Egg, Meat & Fish.
Asian markets continued their downfall and all the indices in the region barring Hang Seng finished the day's
trade in the negative terrain on Thursday, amid rising worries that the US will not be able to resolve a deadlock in talks on raising its debt ceiling, which could spur a credit downgrade or even a debt default. Chinese Shanghai Composite ended with a cut of over half a percent, dragged down by financials, as the mainland's top banking regulator ordered banks not to roll over or renew their loans with government financing vehicles while Nikkei tumbled about one and a half percent as
