Finally, it's red!

Sell-off during the final hour saw the benchmark indices lose all of their earlier gains and plunge into the negative territory. Apart from mixed interest in index heavyweights, selling in key stocks from the auto, banking, software and commodity sectors led to the markets weakening in the closing hour of trade.

The BSE Sensex closed at 6,135 (down 22 points) and the Nifty closed at 1,907 (down 21 points). The rupee was trading at Rs 43.77 per US Dollar

In what was seen as a complete reversal of trend of the past few days when the markets were falling incessantly, trading began today on a very strong note. For almost the entire session, except the last couple of hours, the bulls were in complete control. However, profit booking, especially during the final hour of trade broke the back of the indices as they plunged (once more!) to the negative territory.

Despite selling seen in the final hour of trade today, stocks from the power sector closed today on a strong note and major gainers here included Neyveli Lignite (3%), Tata Power (TTPW.BO, news) (1%) and NTPC (marginally up). Earlier, a leading business daily had reported that, in light of the necessity of meeting the power generation capacity target set for 2012, some financial institutions (FIs) have started to look beyond government guarantees for financing of new power projects. As per the report, projects that are not in a position to get a state government guarantee can now provide a 'charge on assets' as an alternative payment security to the FIs. This is a big positive for the improvement of power scenario in the country.

Final hour sell-off led to stocks from the pharma sector close today largely in the negative territory. Major losers for the day included Wockhardt (2%), Nicholas Piramal (1%) and Dabur Pharma (1%). Glenmark Pharma also closed in the red (down 1%). Selling in the stock was despite reports that the company is launching a new division with a specific intention of penetrating rural areas, small towns and non-metros. The company aims to target this market through general practitioners instead of traditional specialist route that generally operate in bigger cities. With rise in disposable income and the thrust of Government of India of increasing awareness towards health and education in rural hinterland, this move appears to be in right direction as there is a vast untapped market in rural India that is yet to be accessed.

Energy stocks closed strong and major gainers here included Gujarat Gas (3%), ONGC (2%) and IGL (2%). Gains in ONGC were seemingly a result of reports that the company's overseas subsidiary, ONGC Videsh Ltd (OVL), is in talks with Venezuela's state oil company Petroleos de Venezuela for a stake in Tomoporo oilfield containing about 1 bn barrels of recoverable crude reserves. Petroleos plans to increase output at its Tomoporo oilfield, which is amongst the largest in the country from 90,000 barrels a day to 130,000 barrels a day. Global oil majors like French Total, Norway's Statoil, Royal Dutch/Shell, Spain's Repsol and US majors Exxon-Mobil and Chevron Texaco are the other bidders keen to partner PDVSA. OVL also plans to bid for other offshore blocks in Venezuela, which are up for grabs.

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