Indian benchmarks prolong the lull for fourth straight session; end with marginal losses

Indian stock markets have prolonged the lull for fourth straight day and snapped the session on a dull note, marginally below the neutral line as investors at large remained reluctant to build on long positions ahead of official start of the third quarter earnings season with Infosys’ result and also monthly industrial production data. The session largely remained characterized by choppiness as the aimless indices moved only slowly crept towards the previous closing levels after the early decline. The benchmarks gradually inched up towards the psychological 4,750 (Nifty) and 15,800 (Sensex) levels after some improvement in sentiments. The downside risks for the frontline indices was limited by reports that foreign institutional investors (FIIs) invested nearly Rs 6,500 crore into the Indian market, including stocks and bonds, in the first week of the January 2012 ahead of the quarterly earnings season as they expected that most of the headwinds have been factored in by the markets and that the companies will report encouraging earnings for the third quarter. Meanwhile, Indian Prime Minister avowed that with its strong economic fundamentals and robust constitutional processes, India is expected to register an economy growth rate of around 7% in this fiscal year ending March, 2012. The affirmation came a day after the Union Finance Minister Pranab Mukherjee said that Indian GDP would grow by 7.5% in 2011-12. Leads from European markets too remained unexciting as investors awaited the outcome of a meeting between French and German leaders. Moreover, Asian markets settled on a mixed note with the Chinese benchmark outperforming all its peers by surging around three percent on Chinese Premier Wen Jiabao’s statement that Beijing would improve market regulation and protect investor rights after a financial work conference over the weekend.

Earlier on Dalal Street, the benchmark got off to a pessimistic start following the Asian peers as sentiments got pressured by resurfacing worries over the European debt crisis which outweighed encouraging US Jobs data. After the subdued opening, the key gauges plunged to lowest point in the day on sharp across the board sell-off. Thereafter started the road to recovery for the bourses which kept slowly but steadily moving towards the neutral line. The frontline indices even managed to break into the positive terrain in mid noon trades but only for a brief period, tracking the leads from European counterparts. But some final hour profit booking followed by mild short covering ensured that the key gauges extend the consolidation period for fourth straight session. Eventually, the NSE’s 50-share broadly followed index - Nifty settled with trivial losses of four points below the psychological 4,750 levels while Bombay Stock Exchange’s Sensitive Index - Sensex shed thirty points and closed above the psychological 15,800 mark. Moreover, broader markets showed some resilience by outclassing their larger peers by a big margin as investors carried forward their value hunting in beaten down shares from the midcap and small cap space. On the BSE sectoral space, Power counter remained the top gainer in the space with over one and half a percent gains followed by the high beta-Realty index which ended with similar gains. On the other hand, the Oil & Gas index slipped by over half a percent followed by the rate sensitive Auto and TECk counters which too settled with close to half a percent losses. Meanwhile, sugar stocks like Shree Renuka and DCM Shriram remained in jubilant mood after getting a clean chit from competition watchdog CCI from charges of cartelization and price manipulation. The markets consolidated on weak volumes of over Rs 0.97 lakh core while the turnover for NSE F&O segment also remained on the lower side as compared to that on Friday at over 0.83 lakh crore. The market breadth remained positive as there were 1,638 shares on the gaining side against 1,080 shares on the losing side while 104 shares remained unchanged.

Finally, the BSE Sensex lost 34.08 points or 0.22% to settle at 15,814.72, while the S&P CNX Nifty declined by 4.10 points or 0.09% to close at 4,742.80.

The BSE Sensex touched a high and a low of 15,871.51 and 15,678.30 respectively. The BSE Mid cap and Small cap indices up by 0.64% and 1.40% respectively.

The major gainers on the Sensex were BHEL up 3.15%, Jindal Steel up 2.88%, Cipla up 2.50%, Maruti Suzuki up 1.80% and Tata Power up 1.69%. While, Bharti Airtel down 2.93%, SBI down 1.92%, Coal India down 1.59%, Tata Motors down 1.52% and Bajaj Auto down 1.49%, were the major losers on the index.

On the BSE sectoral space, Power up 1.57%, Realty up 1.48%, Capital Goods (CG) up 1.33%, Health Care (HC) up 0.86% and Consumer Durables (CD) up 0.78% were the top gainers, while Oil & Gas down 0.71%, Auto down 0.47%, TECk down 0.47%, FMCG down 0.34% and IT down 0.10% were top losers on the BSE sectoral space.

Meanwhile, even as the global economy is passing through a difficult phase, Indian Prime Minister avowed that with its strong economic fundamentals and robust constitutional processes, India is expected to register an economy growth rate of around 7% in this fiscal year ending March, 2012. Manmohan Singh’s lowering of India’s growth rate down to 7% in the fiscal 2011-12 has come a day after the Union Finance Minister Pranab Mukherjee affirmed that Indian gross domestic product (GDP) would grow by 7.5% in 2011-12.

Asia’s third largest economy saw its GDP grow at the rate of 8.5% in the previous fiscal while it was initially forecasted to expand by around 9% in the current fiscal. But the growth rate in the first half of the current fiscal slipped to 7.3% from 8.6% in the year ago period. As the world is passing through an adverse environment, India too is facing the challenges of the global economic slowdown with declining employment opportunities and increasing protectionism, said the Prime Minister addressing Indian Diaspora gathered from 60 countries at the tenth Prawasi Bharatiya Diwas in Jaipur.

However, Singh instilled some confidence on stating that he is hopeful of bringing back the rhythm of India’s growth processes to sustain an annual growth rate of 9-10% in the medium-term. He further affirmed that domestic savings rate which currently stands at 33-35 percent of the nation’s GDP will greatly facilitate the realization of growth objectives. Prime minister further acknowledged that government’s efforts to battle inflation are producing results and there has been an improvement in the situation.

The S&P CNX Nifty touched a high and low of 4,758.70 and 4,695.45, respectively.

The top gainers on the Nifty were BHEL up 3.35%, Cipla up 3.14%, JP Associates up 2.80%, Jindal Steel up 2.56% and IDFC up 2.55%.

On the flip side, Bharti Airtel down 3.25%, Sesa Goa down 2.29%, SBI down 2.07%, Coal India down 1.72% and Bajaj Auto down 1.64% were the top losers on the index.

The European markets were trading in red. France's CAC 40 down 0.07%, Britain’s FTSE 100 down by 0.04% and Germany's DAX down by 0.24%.

Asian stock markets ended the day’s trade mixed on Monday as continued concerns over the outlook for Europe overshadowed better-than-expected US jobs data on Friday, and pushed the euro to fresh lows against the US dollar and Japanese yen. Concerns about the ability of European leaders to find a comprehensive solution to the eurozone’s ongoing sovereign-debt and banking crisis amid growing worries over the outlook for Greece, Italy and Spain took center stage on Monday ahead of a meeting between French President Nicolas Sarkozy and German Chancellor Angela Merkel.

Chinese benchmark jumped about three percent after the Chinese Premier Wen Jiabao said Beijing would improve market regulation. However, Seoul benchmark fell about a percentage point, weighed down by programme selling ahead of the year’s first expiration date on stock options, with investors remaining dispirited by persistent euro zone debt worries and concerns about upcoming fourth-quarter results.

The stock markets in Japan remained closed on Monday in observance of a public holiday.