On Wednesday 27 July 2011,Local bourses failed to recover from the previous session drubbing, after the Reserve Bank of India surprisingly hiked the key policy rates by a hefty 50 basis points. Investors are of the view that this hawkish stance of the central bank would crimp India's GDP growth in FY12, as consumers and corporate will cut down on their spending. However, the flip-flop of the bourses could also be contributed to the volatility ahead of the expiry of July 2011 derivatives contracts on Thursday, 28 July 2011.Meanwhile, even global markets could not provide any guidance to the Indian
equity market as the investors staying on the sidelines awaited the US debt deal. On the global front, the stalemate in US debt talks dragged down US stocks for a second day on Tuesday, and light volume showed that investors were reluctant to make bets despite another round of healthy earnings. Meanwhile, Asian shares after see-sawing for the entire session ended mixed as US debt worries maintained their grip on the region's investors. The European shares fell on Wednesday as a deadlock over raising the US debt limit raised concerns about a possible default and a downgrade of the country's top-notch credit rating, prompting investors to cut their exposure to riskier assets. Back home, stocks from Capital Goods, Power, Realty along with banking counters plummeted the most. However, the stocks from the Auto space recovered some losses from the early deals. Banking and Realty stocks extended Tuesday's losses, triggered by worries that higher interest rates could dent demand for funds along with demand for residential and commercial properties. However, charmed investor's with their performance were the stocks from the Consumer Durable (CD), Fast Moving Consumer Goods (FMCG) and TECk counters, which were up with the gains ranging from 0.20%-1.5%.
The BSE Sensex lost 87.30 points or 0.47% and settled at 18,430.92. The index touched a high and a low of 18,578.55 and 18,358.76 respectively. 11 stocks advanced against 19 declining ones on the index (Provisional). The BSE Mid-cap index gained 0.27% while Small-cap index was up 0.04%. On the BSE Sectoral front, Consumer Durables up 1.46%, FMCG up 0.30% and TECK up 0.09% were the only gainers. On the flip side, Capital Goods down 1.82%, Power down 1.58%, Bankex down 1.02%, Realty down 0.88% and Oil & Gas down 0.83% were the top losers..
India VIX, a gauge for market's short term expectation of volatility lost 5.44% at 18.25 from its previous close of 19.30 on Tuesday. The S&P CNX Nifty lost 28.00 points or 0.50% to settle at 5,546.85. The index touched high and low of 5,591.70 and 5,521.50 respectively. 18 stocks advanced against 31 declining ones while 1 stock remained unchanged on the index. (Provisional)
Most of the Asian equity indices finished the day's trade in the positive terrain on Wednesday but, investors remained cautious amid the continuing stalemate over raising the US debt ceiling. Chinese Shanghai Composite rose about 0.80 percent, South Korean shares ended higher in the
trade, however, Japanese Nikkei fell half a percent .
