Nifty closes lower on profit booking, global sell-off
10 August 2010
Equity benchmarks closed with modest losses on the back of profit booking as well as sell-off across the globe ahead of FOMC meet today. Technology, telecom, metal and select infrastructure companies' shares along with heavyweights like Reliance Industries, SBI, BHEL, ITC and NTPC witnessed selling pressure.
Global markets were under pressure amid caution ahead of Federal Open Market Committee (FOMC) meeting. The Federal Reserve will meet on Tuesday faced with a key decision about whether to abandon its presumption that the economy is gradually picking up steam and begin to consider new steps to keep the recovery from sputtering out.
David Cohen, Director of Asian Economic Forecasting at Action Economics said the Fed is likely to remain cautious. ''They will want to wait for some further clear evidence that things are turning worse before they announce any new dramatic easing steps,'' he believed.
European markets like France's CAC, Germany's DAX and Britain's FTSE were trading 0.5-0.8% lower, at the time of closing of Indian equities. US index futures like Dow Jones and Nasdaq futures fell 0.5% each. Asian markets also extened losses in late trade; Shanghai tumbled 2.9% and Hang Seng slipped 1.5%. Nikkei, Straits Times, Kospi and Taiwan were down 0.2-0.7%.
However, Tata Motors, ICICI Bank, HUL, L&T, Jaiprakash Associates, HDFC Bank, ONGC, Tata Power and ACC were on the buyers' radar, which capped the losses to some extent.
Tata Motors was the best performer of the day post its better-than-expected numbers for the quarter ended June 2010. Boosted by good sales of Jaquar Land Rover (JLR), Tata Motors has posted healthy results of April-June quarter. The wholesale volume of JLR has gone up 65% which has boosted the topline growth, said C Ramakrishnan CFO of the company. He said that unit realisations have improved while its subsidiaries have posted healthy gains.