In the morning there was a lot of hectic activity on the bourses although the major indices barely moved much. However, a number of stocks were quite volatile, reacting to both Indian and foreign news as well as to company-specific actions.
The trend was cemented for the day and the closing reflected it. At the closing bell, Sensex ended the day marginally down by 0.5 per cent and Nifty too pulled off a similar loss, with both closing at 15,087.88 points and 4,461.15 points respectively.
Among the best performers of the day on the Bombay Stock Exchange ‘A’ Group were TCS (6.6%), Mphasis (5.7%), Yes Bank (5.4%), Torrent Power (5.4%) and Apollo Hospitals (4.4%).
On Sensex, the top 5 were: TCS (6.6%), Wipro (3.4%), Tata Power (2.4%), Infosys (2.4%), ONGC (2.0% ), Hindalco (1.3%), Sterlite Ind. (1.1%), and Tata Steel (0.9 %).
The stock markets in India refused to react positively to the fact that both Dow Jones and Nasdaq had ended last week Friday up by 114 points and 27 points respectively. It looks like only the IT companies were willing to see any positives in that. However, while Japanese markets ended the day in green, the ones in China and later in Europe were not so positive.
Earlier in the morning, Sensex and Nifty, barely moved much, being down by 0.18 per cent and 0.28 per cent at 11:00 a.m., yet some positive news impacted the information technology stocks, causing them to surge on the first day of a new market week.
Shares of as many as six IT companies jumped in the morning due to the positive flow of news from the biggest contributors to their income, the US. The latest figures for unemployment there showed a recovery and that can be loosely translated into an upturn in the economy, which will have a beneficial effect on outsourcing, which forms a formidable part of the Indian IT contracts pie. The unemployment rate has been reported at 9.4 per cent in July (June figure: 9.5%). However, all is still not well. What has happened is that there were expectations of job cuts to an extent of 320,000, but the data indicated only 247,000 jobs were slashed in the month of July, which is the smallest number yet, going back as far as August 2008.
The rub-off on the BSE IT index was enough to cause it to rise by 2 per cent as well as to climb over the 4,000-point mark. However, this is not a flash-in-the-pan for BSE IT as, over the last month, it was the best performer with a 21.55 per cent rise.
Infosys, Patni, TCS, Wipro, Tech Mahindra, Mphasis, and HCL were all up by more than 1 per cent early on.
Among the better performing stocks were Gulf Oil Corp, which has gained over 2 per cent on the news that its board has approved a fund raising drive to the tune of $100 million through American Depository Receipts, Global Depository Receipts or Foreign Currency Convertible Bonds. Another Rs 79 crore would be raised through a rights issue.
Beleaguered post-Corus-takeover, Tata Steel has risen smartly on bourses after it was revealed that the company is looking at an expansion that would see a CAPEX of Rs 40,000 crore over five years to increase its production capacity.
TCS, by dint of rising as much as 4.1 per cent is the leader of the pack, while Infosys jumped by 1.6 per cent, and Wipro by exactly one per cent at 11:28 a.m.
Out of the 30 Sensex stocks, just 7 were in the green, while the rest are in red. Sensex and Nifty (at 11:28 a.m.) fell by 1 per cent each.
By 2:08 p.m., the positive trend remained strong in IT sector stocks, with Infosys rising 3.24 per cent, Mphasis by 4.68 per cent, Patni by 5.54 per cent, TCS by 7.47 per cent, Tech Mahindra by 2.99 per cent, Wipro by 4.23 per cent and even Satyam was up by 0.73 per cent.
However, FMCG shares have come in for a pummeling. While Colgate was down 7.37 per cent, Gillette by 1.21 per cent, HUL by 3.45 per cent, GlaxoSmithKline by 2.90 per cent, ITC by 2.69 per cent, and Nestle by 1.24 per cent, although Henkel was up by a massive 9.53 per cent. The fall in FMCG stocks is being attributed to the worsening monsoon conditions, with rains keeping off well into the month of August. The FMCG index was down by more than 2 per cent.
Another segment that has been badly hit today was the auto sector, with Bajaj Auto being down by 6.50 per cent, Hero Honda by 3.53 per cent, M&M by 8.25 per cent, , Maruti Suzuki by 2.52 per cent, Tata Motors by 1.64 per cent and TVS Motors by 5.23 per cent.
This comes even after domestic passenger car sales registered a 30.91 per cent increase in July over the same month last year. Society of Indian Automobile Manufacturers (SIAM) reveals that domestic car sales stood at 1,15,067 units in July in comparison to 87,901 units in the same month last year. Even motorcycle sales in the country during the month was up 19.48 per cent at 5,46,245 units from 4,57,178 units. The total sales of all vehicles across categories also rose by 20 per cent.