Markets end at 5- week low; Broader markets crash

The market exuberance seem to be fading as benchmark indices succumbed to profit taking in select sectors dragging them to five week closing low even as investors sought the safety of defensive shares.

Although the Finance Minister in his maiden Union Budget toed a fine line between prudence and promises lack of broader reforms weighed on market sentiment.

The S&P BSE Sensex slumped by 348 points or 1.3% at 25,024.35 while the CNX Nifty slipped by 108 points or 1.43% at 7,459.60.

The broader markets underperformed major benchmark indices as BSE Mid-cap index ended lower by over 2.5% and BSE Small-cap index tumbled over 3%.

Meanwhile, Industrial output is seen rising 3.8% in May 2014, higher than 3.4% growth in April, as per the median estimates of a poll of economists carried out by Capital Market.

The government will unveil industrial production data for May 2014 today, 11 July 2014.

Futhermore, the government stated that General Anti-Avoidance Rules (GAAR) will be applicable from April 1, 2015.

As per provisional data from the stock exchanges, the foreign portfolio investors (FPIs) bought shares worth a net Rs 161.55 crore on Thursday, 10 July 2014.

Expert Speak

Nitin Murarka, Head-Derivatives, SMC Global said, “We are seeing continuous call writing in all the strikes above 7600 and put accumulation in 7500, 7400 and 7300 put options.

"Also seeing short buildup and long unwinding in Major Nifty heavy weights stocks.

"This data indicates further weakness in Nifty.

"Nifty has next support around 7400 levels and it is quite likely that Nifty may test or break 7400 levels next week. Overall Market looks sideways to negative.”

Asian Markets

Most Asian share markets slipped on Friday and safe haven assets stayed in demand as investors waited to see how European stocks responded to the latest outbreak of banking jitters in the region.

Japan's Nikkei share average dropped for the fifth day in a row to a 1-1/2-week low on Friday as concern about the financial health of Portugal's top listed bank turned investors risk-averse.

The Nikkei shed 0.3% to 15,164.04, the lowest closing level since June 30. On the week, the index declined 1.8%.

The Indian Rupee

The rupee is trading at 60.25 against the US dollar due to appreciation of the American currency against other currencies overseas.

Sectors & Stocks

On sectoral front, BSE Realty Index tumbled over 5% on profit taking after surging during the morning trades due to key positive announcements in the Realty sector made by the Finance Minister in Union Budget.

Other indices on the losing sides are Capital goods, Power, Metal, Oil& Gas, Consumer Durables and Auto, all down between 1-5%.

On the contrary, BSE Healthcare, IT and FMCG indices ended in the positive zone.

BHEL was the top loser at the Sensex as the scrip shed over 8%. Shares of capital goods companies ended negative as the reforms suggested in the Budget failed to enthuse the investor.

L&T was down by almost by 5%.

Oil and Gas shares also faced selling pressure. Reliance, ONGC and GAIL ended down between 1.5-3.5%

Banking shares mainly PSUs fell for seventh straight session, touching over one-month low as the government has decided to reduce its stake in the public sector banks, enabling the lenders to raise equity from public though it will continue to the hold majority stake. SBI slipped nearly 5%.

Other non-PSUs peers followed the trend and ended lower. ICICI Bank, Axis Bank and HDFC bank shed between 1-3%.

However, healthcare shares witnessed fresh buying. Sun Pharma was the top Sensex gainer and surged over 2% followed by Dr Reddy’s lab up 2% while Cipla gained marginally by 0.17%.

The technology shares ended postive after Infosys reported a better-than-expected consolidated net profit for the first quarter ended June 30, 2014 (Q1). TCS, Wipro and Infosys gained between 1-2.5%.

Among other gainers, HUL and ITC gained between 1.-5%

The market breadth in BSE ended weak as 2,217 shares declined and 710 shares advanced.