Selling Pressure brings Indian Markets down - Alex Mathews

The markets had showed a sideways trend most of the day through the noon session and later in the second part of the day we saw selling pressure which brought the markets down to the lowest point of the day and closed near to it. The end of the day selling was due to the fact that investors don't want to keep their positions open as we entered a week end and during this weekend, the EU leaders are coming together to decide upon the formation of the proposed 940 billion Euros rescue fund. The rollover for the month of October till today was around 41% showing some more positions are there to be rolled over. During the day we saw Larsen & Toubro Ltd. reporting a 15% increase in its net profit for the quarter ended September 2011 at Rs 798 crore compared to Rs 694 crore reported in the corresponding quarter last year. Even though the profits were decent, the growth guidance however was revised down mainly because of the order flow was hampered by investment slowdown, high interest rates, project cancellations, project postponement and higher competition.

On the sectoral front, we saw selling in realty, capital goods, metals and FMCG while consumer durable held on to gains. Downward revision of growth guidance by LT caused selling in capital goods and other infrastructural companies. We saw buying interest in tyre manufacturers like JK tyre, Apollo Tyres etc as rubber futures in Tokyo fell to its lowest level in 14 months.

Asian markets are trading flat tracking flat to positive trading which happened in US. One of the major news in the Middle East was the killing of Muammar Gaddafi by the rebels which was of the reason which caused crude to slip from $88 to around $84 in the anticipation that crude supply from Libya will now be restarted. Chinese stocks fell on speculation that slowing economic growth and the nation's tighter monetary policies are causing the economic activities to slow down. In the European front the governments may unleash as much as 940 billion euro to fight debt crisis and may see a break in the deadlock between Germany and France at their scheduled meeting on 23rd and 26th of this month. Also the US markets held on to gains as Microsoft reported first quarter sales that beat analyst expectation. US index futures are trading in green as talks in Europe move forward.

Source : Equity Bulls

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