Profit taking keeps the market in range; Nifty ends past 8550 mark

Thursday proved a bit of disappointment for the Indian markets, when the benchmarks surged to their fresh historic high with a gap-up start and cooled off within the very first hour of trade to turn choppy thereafter. The markets looked in a consolidation mood and the major bourses remained range-bound after losing their early gains and slipping into red for a couple of times. Traders in early deals got support of Reserve Bank of India deputy governor H. R. Khan’s statement that the central bank is reasonably comfortable with the current account deficit because of lower oil prices, and also with the government setting up a High Level Committee (HLC) to interact with trade and industry and identify areas where clarity on tax laws is needed. The HLC will give recommendations to the CBDT/CBEC for issuance of appropriate clarifications by way of circulars, instructions etc. on tax issues. The CBDT/CBEC will issue the required clarifications, circulars, instructions etc. within a period of 2 months from the date of receipt of recommendations of the HLC, the finance ministry said in a statement.

The global markets showed a better trend and led the surge in early gains of the domestic markets, while the US markets had made a positive close, the Chinese shares surged the most since 2012 and the Japanese equities moved higher with yen sliding to a seven-year low versus the dollar. The European markets though made a positive start but were trading cautiously near an almost seven-year high ahead of a speech by European Central Bank President Mario Draghi.

Back home, the local markets rushed in second half to cover some of their lost ground and managed to recover half of the gains they had gathered in opening trade, with Sensex managing a triple digit rally and Nifty closing past 8550, but profit booking was clearly visible on the trade and traders taking opportunity to pocket the gains. Report that rupee volatility remained at 4-month low despite global turmoil, too supported the sentiments while the consistent interest of retail interest in broader markets kept the market in motion. On the sectoral front, the defensive FMCG sector was in most jubilant form, led by the cigarettes major ITC on reports that Health Ministry proposal to ban sale of loose cigarettes is likely to be put on hold following objections by some MPs, including some Union ministers, and farmers associations against taking drastic regulatory steps. Among cigarette companies, ITC surged by 5.44 per cent, Godfrey Phillips rose 5.08 per cent and VST Industries rose 2.56 per cent on the BSE.

There was some buzz in the PSU sector stocks with the government set to kick off its Rs 58,000-crore disinvestment programme for 2014-15 on Friday by selling 5% stake in SAIL through OFS, the stock ended half a percent lower on reports that the floor price may be set near its current price. The other PSU that came under pressure in latter part of trade was Oil and Natural Gas Corp (ONGC), after the government that was considering reworking the subsidy-sharing formula for the state utilities, said that it will be sharing the burden 50:50 with the country's largest oil and gas explorer as earlier and said that the government is not considering exempting state-owned ONGC from payment of fuel subsidy.

Finally, the BSE Sensex surged by 120.11 points or 0.42%, to 28562.82, while the CNX Nifty gained 26.75 points or 0.31% to 8,564.40.

The BSE Sensex touched a high and a low of 28808.78 and 28448.95, respectively. The BSE Mid cap index was up by 0.25%, while the Small cap index gained 0.31%.

The top gainers on the Sensex were ITC up by 5.44%, Sesa Sterlite up by 2.80%, Cipla up by 2.61%, ICICI Bank up by 0.90% and Hindustan Unilever up by 0.87%. On the flip side, Bharti Airtel down by 2.08%, Hindalco down by 1.84%, BHEL down by 1.56%, Mahindra & Mahindra down by 1.51% and Tata Power down by 1.44%were the top losers.

On the BSE Sectoral front FMCG up by 3.00%, Bankex up by 0.76%, Capital Goods up by 0.40%, Metal up by 0.29% and PSU up by 0.20% were the top gainers, while Infrastructure down by 0.89%, TECK down by 0.62%, Consumer Durables down by 0.53%, IT down by 0.48% and Oil & Gas down by 0.29% were the top losers in the space.

Meanwhile, ahead of the US President Barack Obama's visit as chief guest on the Republic Day, the government has set up an Inter-Ministerial Committee to fast-track investment proposals from US in India. As per the government, the Committee will closely monitor and coordinate the process to ensure that investments from US are put on fast-track in various sectors and opportunities of investment and technology transfer are fully utilised.

The Department of Industrial Policy and Promotion (DIPP) statement highlighted that the committee will identify the bottlenecks faced by the US investors in the country and address them in consultation with all other agencies and state governments concerned. It will take action to promote an attractive business environment and ease of business for companies to invest in all sectors particularly manufacturing. 

The government also hoped that through the formation of this committee practices that promote investment in manufacturing, special emphasis on green, advanced and smart technologies by US companies in India will be encouraged which will increase competitiveness and making Indian manufacturing a significant player in the global supply chain. The committee will be headed by DIPP secretary Amitabh Kant and will comprise officials from various ministries such as finance, environment, power, road, railways, IT and defence.   

The US accounts for around 12% of India’s total exports. Exports to the US stood at $39.14 billion in 2013-14 while imports were $22.50 billion during the period.

The CNX Nifty touched a high and low of 8,626.95 and 8,526.40 respectively.

The top gainers on Nifty were ITC up by 5.45%, SSLT up by 2.75%, BPCL up by 2.41%, IndusInd Bank up by 1.84% and Cipla up by 1.41%. On the flip side, Bharti Airtel down by 2.19%, Hindalco Industries down by 1.98%, HCL Technologies down by 1.97%, Mahindra & Mahindra down by 1.84% and Tata Power Company down by 1.82% were the top losers.

Most of European markets were trading in green, France’s CAC 40 was up by 0.25% and Germany’s DAX was up by 0.28%, while United Kingdom’s FTSE 100 was down by 0.11%.

Asian markets ended mostly in green on Thursday as record highs on Wall Street amid fresh signs of resilience in the US economy and continued hopes that central banks in China and Europe will unveil further stimulus encouraged investors to buy riskier assets. Chinese shares soared to hit a three-year high, as investors piled up shares of financials, oil and brokerage companies on bets the People's Bank of China will follow up on last month's rate cut with further interest rate cuts and reduction in banks' reserve requirement ratios. Japanese shares extended gains for a fifth straight session as persistent weakness in yen lifted exporter shares.