Mumbai: It was a disappointing session on Dalal Street. After remaining choppy in the first half of the session, the market took a late dive. This as disappointing earnings from the likes of L&T, JSW Steel and Idea hurt sentiment.
However, indices managed some recovery in last minutes of trade and settled the trade 0.8 per cent lower. The sell-off in oil & gas, metal, FMCG, power, telecom and private financial companies' shares too added fuel to the fire.
The 30-share BSE Sensex fell 151.25 points, to close at 16,785.64 and the 50-share NSE Nifty dropped 41.95 points, to end at 5,049.95. For the week, the benchmarks lost over 1.5 per cent.
According to Devangshu Datta, Consulting Editor of Outlook, the market will not drop below 4950-4925 till the expiry on Tuesday.
Overall the market has seen consolidation on Friday, ahead of three events next week: RBI policy (Tuesday), F&O expiry also (Tuesday), and European Financial Stability Facility (EFSF) meeting has been postponed till Wednesday after split between Germany and France over bailout plan.
Europe's efforts to solve its escalating debt crisis plunged into disarray as Germany and France could not bridge their differences in time for a summit on Sunday, forcing them to call a second meeting on Wednesday. Yesterday Offices of French President Nicolas Sarkozy and German Chancellor Angela Merkel announced they needed more time.
The situation in Europe will define market moves, believes Archie Hart of Investec Asset Management.
Engineering and construction firm L&T's profit grew 15 per cent (YoY) in second quarter FY12 at Rs 798 crore while net sales was at Rs 11,254 crore, up 20.5 per cent. The company has maintained revenue guidance at 20-25 per cent.
However, it has revised order inflow guidance to 5 per cent from 15 per cent for FY12. "Orderflow marked down on considerable slowdown in investment," it said. Even the company sees margin contraction in FY12 by 75-125 bps from 50-75 bps. The stock plunged 3.5 per cent.
Bharti Airtel and Tata Motors slipped 3 per cent each. From the financial space, HDFC, ICICI Bank and HDFC Bank were down 0.7-1.7 per cent.
In the metal space, Sterlite Industries, JSPL, Tata Steel and Hindalco dropped 1-2.5 per cent. ITC and HUL from FMCG space fell 0.8 per cent and 1.6 per cent, respectively.
Heavyweights like ONGC, Reliance Industries, Infosys and NTPC declined 0.4-1 per cent while SBI, TCS and BHEL gained 0.3-0.7 per cent.
In the auto space, Bajaj Auto, Maruti Suzuki (strike ended at its Manesar plant) and Hero Motocorp jumped 1-1.5 per cent.
The Indian rupee has crossed an important psychological level today. It crossed the 50 mark against the dollar, the most expensive it has been since April 2009.
Brijen Puri, head of FX trading at JPMorgan said that the market may actually push the dollar higher if it doesn’t close below the 50 level today.
“The next target the market would be looking at would be 50.75-50.80 levels,” he said, adding that the European situation and the news flow over the coming weekend is going to be closely tracked.
On the global front, European markets like France's CAC, Germany's DAX and Britain's FTSE were up over 0.6 per cent, at the time of closing of Indian equities. Asian markets closed mixed.
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