Friday, March 11, 2011

Sensex ends lower on Japan quake, economic woes

Indian markets pared some off the intra-day losses and ended near support levels Friday reacting to earthquake and tsunami waves in Japan, weak US economic data and protests in the middle-east.

An earthquake of magnitude 8.9, worst in 140 years, struck northern coast of Japan triggering Tsunami waves as high as 10 meters. Nuclear reactors and airports were affected as the waves damaged everything that came in their way.

According to experts, apart from sentimental knee-jerk reaction, Indian markets will not be affected by the tragedy in Japan.

?Does it make any difference to Indian economy? I do not think so. Is it hitting sentiment in the market today? Absolutely, the markets moved down. But I do not think people can change their investment decisions in India because of this tragedy in Japan,? said Adrian Mowat , MD & Chief EM Strategist, JP Morgan to ET Now.

The tremors hit global markets badly which were already under pressure on economic concerns. Indian markets had opened in the red reacting to weekly jobless claims in the US which increased to 397000. Trade deficit also worsened more than expected to $46.3 billion.

Public unrest in the middle-east also kept the investors jittery. Demonstrators had planned protests in the Saudi Arabia's capital Riyadh for political reforms.

There was some relief back home as January IIP data turned out to be better-than-expected. India?s Industrial Output in January grew at 3.7 per cent against 2.5 per cent in December.

?With the base effect impacting the numbers, Jan industrial output remained subdued but came in higher than ours and consensus expectations (Citi 2.8%; Consensus 2.9%).

Given the continuation of the high base effect in the coming quarter (growth averaged 15%), we except the numbers to remain in low single-digits,? said Rohini Malkani, Economist, Citi India.

?We thus maintain our view of the RBI hiking by an additional 50bps in 2011 with a 25bps hike likely in its review next week and a further 50bps 2012,? she added.

Finance Minister Pranab Mukherjee said he was not satisfied with the pace of expansion of India's industrial output.

National Stock Exchange?s Nifty ended at 5445.45, down 48.95 points or 0.89 per cent. The broader index touched a low of 5411.55 and high of 5502.70 in today?s trade.

Bombay Stock Exchange?s Sensex closed at 18174.09, down 153.89 points or 0.84 per cent. The 30-share index touched a low of 18063.29 and high of 18368.43 intraday.

BSE Midcap Index was down 1.07 per cent and BSE Smallcap Index declined 1.12 per cent.

Amongst the sectoral indices, BSE Metal Index fell 1.91 per cent lower, BSE IT Index slipped 1.49 per cent and BSE Power Index was down 1.49 per cent. BSE Oil&gas Index was up 0.81 per cent and BSE FMCG Index was up 0.03 per cent.

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