Weak market recovers on Bharti's back, ends with modest loss

The Sensex saw a U-shaped recovery in the last one hour of the trade and closed marginally lower. Today's recovery was led by heavyweights Bharti Airtel, Tata Motors and DLF, which shot up 5.8%, 4.4% and 2.9%, respectively. The Index recovered 319 points from the day's low of 14,701.05 and the Nifty 98 points from low of 4359.40.

The economic data announced by the government was much better-than estimates but the markets shrugged off due to fall in Asian markets. June IIP (index of industrial production) came in at 7.8% as against 5.4% year on year and 2.7% month on month. The CNBC-TV18 poll saw IIP at 3.7%. The growth numbers were far better across the sectors.

Sonal Varma, India Economist with Nomura Financial Advisories said there were two key that have driven this increase. One was the governments' own spending that is driving a lot of rural demand and secondly she said, ''This is a quarter where we have seen a lot of inventory rebuilding, so these two factors combined have been the big reason for the surprise.''

On the sectoral front, telecom, realty, pharma, auto, cement and oil marketing companies' shares helped the equity benchmarks. However, selling continued in shares of metal, technology, oil & gas exploration, select banking and power companies.

The benchmark indices started the session on a lower note following weak global cues. As the day proceeded, the indices slipped further, the Nifty traded below the 4400 mark and the Sensex below the 15,000 level for major part of the day on the back of 4.7% fall in Shanghai and 3% in Hang Seng. Chinese bank said lending fell over 77% in the month of July compared to previous month. Slump in exports was another concern. Among other Asian markets, Jakarta, Nikkei and Straits Times fell 1-2%. Kospi was down 0.9%. (Also Read - Shanghai Composite may test the 3000-mark: Experts)

The last one hour played a very important role for the markets as it showed smart recovery of over 300 points from the day's low on the Sensex. About 0.5% gains in the European markets also helped our indices to some extent. Bharti Airtel was the stunner for the recovery. Both the indices clawed back above their psychological evels of 15,000 and 4,400. The 30-share BSE Sensex closed just 54.43 points or 0.36% lower at 15,020.16 and the 50-share NSE Nifty shut shop at 4457.50, down 0.31% or 13.85 points.