Market Analysis - 21st March 2011

SENSEX -      17,839.05    -39.76 (-0.22%)

NIFTY    -      5,364.75      -8.95 (-0.17%)

Indian markets were choppy today, weighed down heavily by the Libyan crises and firm Oil prices. Both the major indices slipped 0.2 percent down to their lowest since 28th February.

In the morning markets opened in the green based on firm Asian cues. Market breadth was positive in the morning, but the markets started slipping later on.The benchmark index is already down 13 percent year-to-date, making it one of the worst performing major markets in 2011. 

Foreign funds have pulled out $1.8 billon from Indian equities since the start of the year up to March 17, pestered by sticky inflation.

The BSE 30-share Sensex was down 39.76 points or 0.22% to 17,839.05, its lowest closing since 28 February 2011. The index slipped 86.64 points at the day's low of 17,792.17 in morning trade. The Sensex gained 128.92 points at the day's high of 18,007.73 at the onset of the trading session. 

The S&P CNX Nifty was down 8.95 points or 0.17% to 5,364.75, its lowest closing level since 28 February 2011. The Nifty hit a low of 5,348.20 in morning trade. 

The market breadth, indicating the health of the market, was weak. On BSE, 1698 shares declined while 1212 shares advanced. A total of 102 shares remained unchanged. The breath was positive earlier in the day.

The BSE Mid-Cap index slipped 0.27% and the BSE Small-Cap index declined 0.29%. Both these indices underperformed the Sensex. 

Nine of the 13-sectoral indices on the BSE logged declines. The BSE Realty (down 0.91%), the BSE IT (down 0.72%), and the BSE TecK (down 0.63%), underperformed the Sensex.

The IT index fell for a second straight day due to fears that the quake in Japan will significantly impact the IT market there. Japan is the second largest IT services market globally after US.

Soaring global crude oil price is a cause of concern for India which imports 70% of its oil requirements. Surging oil prices have stoked concerns about higher inflation and interest rates. US crude futures were up $2.09 a barrel or 2.07% to $103.16 a barrel amid ongoing tensions in the oil-rich Middle East and North Africa region. The conflict in Libya escalated, with international coalition forces conducting air strikes over the country while its embattled leader Col. Moammar Gadhafi vowed to wage a "long war." The air attacks came after the United Nations Security Council authorized all necessary measures, including a no-fly zone over Libya by resolution on Friday, 18 March 2011. 

Most Asian markets were firm on Monday, 21 March 2011, as Japan made progress in tackling a nuclear crisis and amid signs a US economic recovery is strengthening. The key benchmark indices in China, Hong Kong, Singapore, South Korea, Indonesia and Taiwan were up by between 0.10% to 1.73%. Japanese markets are closed for a public holiday today, 21 March 2011.

US stocks rose on Friday, 18 March 2011, as fears of increased violence in Libya ebbed and currency interventions helped ease investor worries over Japan's economy. The Dow Jones Industrial Average finished with a gain of 83.93 points, or 0.71%, to close at 11858.52. The Nasdaq Composite added 7.62, or 0.29%, to 2643.67 and the Standard & Poor's 500-stock index rose 5.49, or 0.43%, to 1279.21.