Morning Note - Market Insight By Mansukh - 15th July, 2011

On Thursday 14 July 2011, Local bourses after see-sawing for the entire session managed to hold their previous  levels  at  the  end  of  the  trade,  thereby  putting  forth  second  consecutive  green  closing. However,  benchmark  indices  pared most of their gains achieved  in the afternoon  deals since the investor's shaken confidence led them to pocket majority of their gains towards the dying hours of the trade. Jitters post Wednesday's serial bomb blasts in the country's financial capital coupled with the surging  inflation  data,  majorly  dented  the  sentiment.  As  India's  food  inflation  snapping  two consecutive weeks's decline, quickened to 8.31% for the week ended July 2 v/s 7.61% in the previous week. However, some solace came to the markets with the release of the Monthly Inflation data, which came in lower than the expectation. The annual rate of inflation, based on monthly WPI, stood at 9.44% for the month of June 2011 as compared to 9.06% seen in the previous month and 10.25% during the corresponding month of the previous year. Despite accelerating in the month of June the numbers came lower than the estimation as some economists forecast a gloomier picture and a sharper rise to 9.7% because of the recent hike in petroleum products prices by the government. On the global front, US stock indices halting a three-day slide, ended with modest gains on Wednesday after Fed Chairman Ben Bernanke suggested the Fed would consider additional measures to support the economy if the outlook gets worse. Moody's placed its US rating under review for a possible downgrade if the Treasury's debt ceilings were not raised soon and the government defaults on a debt payment. The European shares resumed  their  downward  journey  on Thursday  after  gaining  in previous  session;  with  investors dumping riskier assets on Moody's warning to US.

1) The BSE Sensex gained 2.27 points or 0.01% and settled at 18,598.29. The index touched a high and a low of 18,803.05 and 18,449.23 respectively. 16 stocks advanced against 13 declining ones while 1 stock remained unchanged on the index. The BSE Mid-cap index gained 0.40% while Small-cap index was up 0.14%. On the BSE Sectoral front, Realty up 2.22%, Bankex up 0.97%, Health Care up 0.76%, Metal up 0.48% and Consumer Durables up 0.36% were the top gainers.

2) India VIX,a gauge for market's short term expectation of volatility gain 2.30% at 19.97 from its previous close of 19.52 on Wednesday.  The S&P CNX Nifty gained 0.75 points or 0.01% to settle at 5,586.20. The index touched high and low of 5,653.95 and 5,541.70 respectively.  26 stocks advanced against 24 declining ones on the index.(Provisional)

3) Asian equity indices finished the day's trade on a mixed note on Thursday as Moody's Investors Service's review of US credit ratings for a possible downgrade prompted caution, pressuring financial stocks and some exporters. China's main stock index ended the trade with a gain of over half a percent, supported by strong gold miners for a second-straight session on the back of surging gold prices.