Mumbai: The Sensex on Wednesday gained 115 points despite a disappointing domestic second quarter GDP and weak global peers. The day has been very volatile as the index has seen a swing of 330 points, before closing at 16,123.46. Oil & gas, telecom, FMCG, technology and HDFC group's stocks helped the Nifty to close up 27 points at 4,832.05.
Experts fear the volatility in the market is here to stay. "The market will continue to remain extremely vulnerable", says Dilip Bhat, joint managing director of Prabhudas Lilladher. He cautioned that downgrades now seems to be looming large on the Indian shores.
In an interview to CNBC-TV18, he further said that there is 'nothing' at the moment that is inspiring the markets to break on the upward side. "I think the market will remain very vulnerable and possibly we may see 4,500 by the end of December," he said.
India's economic growth for the July-September quarter slipped to 6.9 per cent, the lowest in over two years. It was 7.7 per cent in the previous quarter.
"Investment is going to remain extremely weak. Hence, we will probably hover somewhere around 7-6.5 per cent mark on overall growth terms," Rahul Bajoria of Barclays Capital said. He held that the policy paralysis has started weighing on the sentiment of the corporate sector. High inflation prompted the central bank to hike rates for 13 times in the past, and policy paralysis has been hovering most sectors.
"The government needs to address this if it wants to restart the capex cycle because that is where the solution to our growth and inflation problems is," he further added.
Rating agency Moody's arm says, it may need to cut 2012 India GDP outlook to near 6.5 per cent from 7 per cent, reports CNBC-TV18 quoting NW18. "It looks like tough times ahead for India's economic growth."
Global markets too remained lower on eurozone worries. France's CAC, Germany's DAX and Britain's FTSE fell 0.5-1 per cent. The Dow Jones futures slipped over 50 points.
At close, China's Shanghai underperformed all markets globally, falling 3.3 per cent. Hang Seng, Kospi, Nikkei and Taiwan were down 0.5-1.5 per cent while Straits Times gained 0.5 per cent.
Back home, the Sensex and Nifty fell over 9 per cent in November. In the year 2011, both indices crashed over 21.5 per cent.
On Wednesday, oil & gas majors and index heavyweights ONGC and Reliance Industries gained 3 per cent and 1.8 per cent, respectively.
Shares of country's largest telecom player Bharti Airtel shot up over 3 per cent. MSCI added the stock in its portfolio, and the company crossed 50 million subscribers in Africa.
Among other largecaps, ITC, HDFC Bank, HUL, TCS, NTPC, Wipro, Maruti and DLF gained 1-2 per cent. HDFC rose 0.8 per cent and SBI was up 0.4 per cent.
However, shares of India's second largest lender ICICI Bank lost 3 per cent after MSCI reduced weightage in its portfolio.
Tata Motors, Hero Motocorp and Sterlite lost 3 per cent. L&T and Tata Steel were marginally lower.
The broader indices closed 0.7 per cent lower. Declining outnumbered advancing ones by 1515 to 1244 on BSE.
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