Late hour buying helps benchmarks to end flat

Indian equity benchmarks staged a smart recovery in last leg of trade on Tuesday and ended the session mixed, pairing most of their early losses, supported by short-covering in beaten down but fundamentally strong stocks. Nevertheless, traders remained cautious ahead of Russia and Ukraine Leaders meet later in the day amidst fears of escalation of ongoing geo-political tensions. Earlier, markets after a positive start entered into red terrain on the back of feeble cues from regional counterparts and extended their downfall to touch intraday lows. The indices even went on to test important psychological 26,300 (Sensex) and 7,850 (Nifty) levels, but the key gauges got solid support around those intraday low levels as they convalesced from thereon.

Traders remained cautious ahead of the release of Q1FY15 GDP and Current Account Deficit (CAD) numbers. Street widely expects Asia’s third largest economy is likely to grow 5.3% in the first quarter of this fiscal (April-March), up from 4.6 percent in January-March, which would be the fastest since the quarter that ended in March 2012.

On the global front, European markets were trading mostly in the red in early deals as investors booked profits at higher levels post the sharp gains seen on Monday on hopes of further monetary stimulus measures from the European Central Bank to boost the economy. Asian counters too ended mostly in negative terrain with Chinese shares declining the most. Japanese shares which had rebounded yesterday failed to extend gains after investors booked profits as the weakening yen was seen stable against the dollar.

Back home, power stocks witnessed yet another rough session of trade. Mass cancellation of the blocks would be a worst-case scenario for the Power sector as this would add to a shortage of coal for power plants. Stocks related to banking sector too remained under pressure as the Reserve Bank of India Governor Raghuram Rajan has cautioned finance secretaries of state governments against debt waiver schemes as banks are already starved of capital.

On the flip side, shares of pharmaceutical companies continued their northward journey with most of the frontline stocks logging their lifetime high levels after reporting healthy results for the June quarter. Additionally, while Metal stocks managed to recover from previous sessions’ jolt of Supreme Court calling coal block allocations made by government to various firms between 1993 and 2009 as illegal.

The NSE’s 50-share broadly followed index Nifty dipped marginally but it managed to hold its psychological 7,900 support level, while Bombay Stock Exchange’s Sensitive Index -- Sensex rose by just five points to finish above the psychological 26,450 mark. Broader markets, however, ended in the red with a cut of around half a percent. The market breadth remained in favour of decliners, as there were 1130 shares on the gaining side against 1828 shares on the losing side while 116 shares remain unchanged.

Finally, the BSE Sensex gained 5.79 points or 0.02%, to 26442.81, while the CNX Nifty lost 1.55 points or 0.02% to 7,904.75.

The BSE Sensex touched a high and a low of 26481.97 and 26314.89, respectively. The BSE Mid cap index was down by 0.24%, while the Small cap index lost 0.80%.

The top gainers on the Sensex were Hindalco up by 3.64%, Tata Steel up by 2.57%, GAIL India up by 1.49%, Hindustan Unilever up by 1.40% and Sun Pharma up by 1.35%. On the flip side, Tata Power down by 2.77%, ONGC down by 2.48%, Larsen & Toubro down by 1.33%, Maruti Suzuki down by 0.96% and Wipro down by 0.78% were the top losers in the index.

On the BSE Sectoral front, Healthcare up by 1.12%, FMCG up by 0.90%, Metal up by 0.75%, Consumer Durables up by 0.33% and IT up by 0.24% were the top gainers, while Power down by 1.32%, PSU down by 1.03%, INFRA down by 0.97%, Capital Goods down by 0.84% and Oil & Gas down by 0.70% were the top losers in the space.

Meanwhile, with an aim to enhance the country’s exports, the government will revive the export interest subsidy scheme, which expired in March 2014. It has already made budgetary provision of over Rs 1,600 crore for the export interest subsidy.

Commerce ministry is presently in discussion with the finance ministry and selecting the sectors that would be covered by the scheme in the new five-year policy expected to be announced at the end of September.

The Foreign Trade Policy (FTP), which governs all exports and imports related activities in India, ended on March 31 and the new government will introduce new FTP for the period 2014-19 in September 2014. In the previous trade policy, the benefit of interest subsidy was earlier available to sectors such as micro small and medium enterprises, handlooms, handicraft, carpets, toys, sports goods, processed products, certain engineering and textiles goods. The export interest subsidy helped increase the competitiveness of goods on global level.

The new FTP is likely to promote exports of specific products in specific geographies, job-creating manufacturing sectors and would also abolish conventional method of exports by focusing more on areas like branding of products in the global markets, exports of services and hi-tech products and new strategy for marketing.

The CNX Nifty touched a high and low of 7,915.45 and 7,862.45 respectively.

The top gainers of the Nifty were Hindalco Industries up by 3.82%, Tata Steel up by 2.53%, Lupin up by 1.88%, BHEL up by 1.61% and GAIL (India) up by 1.54%. On the other hand, Jindal Steel & Power down by 6.19%, IDFC down by 2.79%, ACC down by 2.72%, Tata Power Company down by 2.71% and ONGC down by 2.03% were the top losers.

Most of European markets were trading in green, France's CAC 40 was up by 0.04%, and United Kingdom's FTSE 100 was down by 0.23%, while Germany's DAX was down by 0.37%. 

Asian markets ended mostly in red on Tuesday, with the stocks falling for the first time in three days after valuations on the regional gauge climbed to the highest level this year. The cost of insuring Malaysian government bonds fell to a 15-month low on speculation an improving US outlook will bolster the Asian nation’s exports. Zeti Akhtar Aziz, Malaysia’s central bank governor, commented on monetary policy and risks to inflation and growth. The governor stated that the country has to assess the situation as we go along.  Japan’s corporate services price index (CSPI) remained unchanged at a seasonally adjusted annual rate of 3.7%, compared to the preceding month whose figure was revised up from 3.6%. Singaporean Industrial Production rose to an annual rate of 3.3%, from 0.8% in the preceding month whose figure was revised up from 0.4%.