Wednesday, August 05, 2009

It's the monsoon; Sensex loses 93 pts

Equity benchmarks snapped the three-session winning streak on Tuesday, as investors restricted stock purchases on concerns over the impact


of scanty monsoon on Indian economy's revival.

BSE's 30-share Sensex ended the day at 15830.98, down 93 points, over the previous close, after briefly crossing the 16000-mark earlier in the session. NSE's 50-share Nifty closed at 4680.50, down 31 points, over the previous close.

The broader market ended with a positive bias, albeit marginal, with gainers outnumbering losers 1480:1242 on BSE.
Fund managers said though stock valuations factor in an even corporate earnings growth estimates of 2010-11, in part, the momentum could carry the markets to higher levels.

"The sentiment continues to be positive, but remains to be seen to what extent it can translate into absolute gains from these levels," says Krishna Sanghi, head-equities, Kotak Mutual Fund. "The domestic triggers have all played out, and for some time the market will take cues from global trends and liquidity," he said.

Foreign and domestic institutions net bought Indian shares worth Rs 219 crore and Rs 253.29 crore, respectively, according to provisional data.

The Meteorological Department said India's annual monsoon rains have not progressed much this week in the north, an event that is expected to hit the crops there.

Merrill Lynch, in its report said, "Let's face it, while we will wait a week, it looks virtually impossible to recoup rice cultivation - now 25% below last year. Yes, rice is but approximately 1% of GDP, but nearly 20% contraction will likely hit growth around 50bps, after second-round effects."

Elsewhere in Asia, most markets, barring Japan, ended weak on Tuesday.

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